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Insider: WiMax CrackUp Coming

Light Reading
LR Mobile News Analysis
Light Reading
7/23/2004

The latest edition of the Unstrung Insider predicts a renaissance for the fixed wireless market with the forthcoming WiMax specification in 2005 (see WiMax: Last Mile Smiles and WiMax: How Far? How Fast?).

Sadly, the report, called "WiMax: Going the Distance," also suggests that the fixed wireless boom may come too late for some of the companies currently involved with the technology.

"With all the excitement around 802.16 and WiMax, it would be easy for the industry to forget the most important thing: how vendors make a profit," writes the report's author, Gabriel Brown. "Unfortunately the prognosis is dire. The patient is barely hanging on."

Table 1: BWA Profitability (Loss) By Vendor, By Quarter ($ Millions)

2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03 1Q04
Airspan ($10.20) ($5.00) ($4.70) ($5.60) ($10.40) ($6.80) ($6.70) ($5.40)
Alvarion ($5.00) ($5.00) ($5.40) ($4.00) ($5.90) ($2.10) $0.80 $1.40
Ceragon ($3.00) ($3.30) ($3.00) ($2.10) ($1.10) ($0.70) ($0.30) $0.40
Harris ($5.80) ($7.30) ($8.20) ($0.80) ($10.60) ($2.20) ($1.60) ($2.50)
P-Com ($6.70) ($5.80) ($22.10) ($10.40) ($6.00) $9.40 ($5.90) ($2.40)
Proxim ($6.70) ($31.90) ($142.1) ($9.30) ($47.20) ($36.60) ($34.40) ($15.80)
SR Telecom ($2.50) ($2.60) ($4.20) ($7.90) ($7.20) ($15.00) ($12.20) ($15.10)
WaveRider ($1.40) ($6.00) ($0.90) ($0.30) ($0.10) ($1.00) ($3.70) ($1.60)
Wi-LAN ($8.00) ($10.20) ($2.00) ($0.73) $0.30 ($0.70) ($0.40)
Source: company data, Unstrung Insider


Alvarion Ltd., Brown notes, is the only profitable vendor in the sector, although "breakeven is in sight" for Airspan Networks, Harris Corp., and Wi-LAN Inc.

The spike in profitability in the third quarter 2003 for P-Com Inc. in fact relates to a capital infusion into the normally loss-making company.

Even though the coming of WiMax is expected to be a tonic for the fixed wireless industry in general, the smaller vendors in the market may not be the main beneficiaries. For, as Brown notes, major vendors such as Alcatel SA, Motorola Inc., and Siemens AG are now also starting to focus on WiMax.

"There are simply too many small vendors in the BWA sector," writes Brown. "Consolidation and business failure look inevitable." — Dan Jones, Site Editor, Unstrung

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Technoscribe
Technoscribe
12/5/2012 | 1:25:00 AM
re: Insider: WiMax CrackUp Coming
The report seems to beg the question why, if vendors aren't going to make any money out of WiMax, will they bother in the first place? Also, why isn't Redline in the table?
IPobserver
IPobserver
12/5/2012 | 1:24:56 AM
re: Insider: WiMax CrackUp Coming
Redline is private and doesn't produce quarterly reports. It just announced $18 million in funding: http://www.unstrung.com/docume...

WiMax will help some companies make money and a standard (commodity) MAC and PHY is obviously a good thing. If you're in the fixed wireless access business and you're making a loss, what else are you going to do but adopt WiMax?

The way I see it, WiMax will become a baseline for many types of application -- with vendors deciding to optimize products for self-install wireless DSL or enterprise access, for example.
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