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Ericsson Cool on WiMax

Cellular infrastructure giant LM Ericsson (Nasdaq: ERICY) is unwilling to commit itself to the nascent WiMax wireless metropolitan area network (MAN) market, mirroring a strategy adopted by rival Nokia Corp. (NYSE: NOK).

WiMax is the WiMax Forum's marketing term for the 802.16a wireless MAN standard. As well as promoting the technology, the Forum will do interoperability testing when products start to arrive late in 2004 and 2005.

Initial products bearing the WiMax badge are expected to be based on the 802.16a revision d specification, which is intended as a high-speed fixed wireless cable/DSL replacement technology.

After that, products using 802.16a version e are expected to hit the market. This variant is supposed to support faster handoffs between WiMax base stations and so could be used for applications where the user is mobile (see Working for the MAN).

According to Ericsson’s Mikael Halén, director of marketing for business unit systems, the vendor is “studying” the technology but is “not doing anything active to put an offering in the market.”

“We think we’re in good shape to analyze the potential of the market,” he comments.

The Swedish vendor has also declined the opportunity to join the WiMax Forum.

“At this moment Ericsson is not a member of the Forum,” says Mohammad Shakouri, Forum board member and VP of marketing at Alvarion Ltd. (Nasdaq: ALVR). “There has been discussion, but... mobile integrators like Ericsson are still debating and watching the market.”

Last month Finnish incumbent Nokia reneged on an earlier commitment to the market, citing concerns that the technology is not nearly ready yet and in danger of suffering from industry overhype (see Nokia Chills on WiMax).

The Nordic viewpoint contrasts vividly with recent announcements from network rivals Alcatel SA (NYSE: ALA; Paris: CGEP:PA) and Siemens AG (NYSE: SI; Frankfurt: SIE). Both vendors have outlined plans to move into the market in 2005, using silicon from Intel Corp. (Nasdaq: INTC). (See WiMax Gets Serious, Alcatel, Intel Team on WiMax, and Siemens Plans WiMax Move.)

“The likes of Alcatel and Siemens are looking at WiMax as a complementary enhancement to DSL,” adds Shakouri. “They are the first movers. The mobile integrators like Ericsson will wait a little bit longer to examine the mobile capabilities of WiMax. They are not the early adopters.”

Analysts are unsurprised by Ericsson’s reticence. “Ericsson's got a few reasons to go slow on WiMax,” comments Current Analysis’s Peter Jarich. “For mobile backhaul, it's already got the Mini-Link product, both in point-to-point and point-to-multipoint forms. Given Ericsson's position in GSM, the Mini-Link has been quite successful even without a standard like 802.16 behind it.” (See Ericsson Hits Pietra Miliare and VimpelCom Picks Ericsson Node.)

Jarich believes it is still too early to announce the success of WiMax. “Hopefully, the presence of a standard and Intel's participation will drive down costs and support deployments, but we've all seen the failure of broadband wireless in the past.”

— Justin Springham, Senior Editor, Europe, Unstrung

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