The argument holds that carriers and WISPs are stalling on equipment contracts until they can be sure they’re getting genuine, interoperable kit, as certified by the WiMax Forum. Reports from the field, however, give a mixed picture.
Canadian vendor Wi-LAN Inc. (Toronto: WIN), for example, recently warned its revenues for the year to October 2004 would come in at $25 to $28 million, significantly below the previously forecast $32 million to $37 million range. The slowdown in sales is partly “in anticipation of Wi-LAN's Libra MX product series later this fall and of Wi-MAX Certified equipment in the first half of 2005,” says a company statement.
“Other broadband wireless equipment vendors are offering near-obsolete equipment at bargain basement pricing to establish market share, particularly in the Chinese market,” continues the statement. (see Wi-LAN Cuts 2004 Guidance).
It’s unclear, however, if this is a company-specific incident, or if it indicates a wider industry trend. Certainly there are enough vendors talking up their prospects.
Privately held Aperto Networks says it’s not the case that the coming WiMax certification is slowing the market. “I don’t buy that at all. We’ve just had our best-ever quarter,” says vice president of marketing, Alan Menezes. “Think about it: From a services provider’s perspective you get revenues from signing up subscribers.”
Keith Doucet, marketing chief from Redline Communications Inc., also discounts the theory. “It’s true that everybody’s waiting for lower-cost customer premises equipment" for the low-end, he says. “But today people are using our 802.16a product for backhaul and enterprise access, and I’m not seeing a stalling in those markets.”
Among the quoted broadband wireless access vendors there is more talk of positive momentum. Sector leader Alvarion Ltd. (Nasdaq: ALVR), for example, reported record sales of $44.7 million in its first quarter 2004 and is guiding higher for the rest of the year. (see Analyst Boosts Alvarion).
Airspan Networks is similarly on the upswing, having reported first-quarter 2004 sales of $12.4 million, up 38 percent on the previous quarter. And for the full year, it says, sales will be in excess of $80 million off the back of its acquisition of Nortel Networks Ltd.’s (NYSE/Toronto: NT) Proximity business unit in November 2003 (see Airspan Acquires Nortel Sub for more on that deal).
On balance, then, it seems the wait for WiMax isn’t having a massive impact on ongoing business. What is clear is that everyone is expecting a substantial chunk of new business to open up once the WiMax Forum’s certification program is in place sometime in the first half of 2005.
— Gabriel Brown, Chief Analyst, Unstrung Insider
For more on this topic, check out:
- The new Unstrung Insider report: WiMax: Going the Distance. The report is available as part of an annual subscription (12 monthly issues) to Unstrung Insider, priced at $1,350. Individual reports are available for $900.