5 Comments

Summary:

Business 2.0: Intel’s hype machine is working overtime to promote WiMax. Here’s why the new standard won’t be a huge hit. (Sub. rqd) [click here for the PDF] WiMax is based on the 802.16 wireless networking standard, which uses the unlicensed wireless spectrum to transmit data […]

Business 2.0: Intel’s hype machine is working overtime to promote WiMax. Here’s why the new standard won’t be a huge hit. (Sub. rqd)

[click here for the PDF]

WiMax is based on the 802.16 wireless networking standard, which uses the unlicensed wireless spectrum to transmit data across metrowide networks. It covers far more territory than Wi-Fi, which is essentially a local area network technology. Thus far Intel has set aside a relative pittance, $150 million, for developing and promoting WiMax and other wireless technologies. But its dream for WiMax is huge.

Intel is touting a three-step plan for turning WiMax into a cable and DSL killer. First it will be used as a transport technology — a way to connect Wi-Fi hotspots to the Internet cheaply. Here WiMax is likely to have an advantage over current offerings that use proprietary architectures, but this is a minuscule market that will have a nearly imperceptible impact on Intel’s bottom line.

In the second stage, WiMax will replace DSL and cable. But the question here is, Do consumers really want broadband wireless access? Intel’s own research suggests that there will be about 7 million broadband wireless subscribers worldwide in 2007 — a tiny fraction of the 124 million DSL connections expected in 2007, according to International Data Corp. (DSL is more popular worldwide than cable, which is mainly a U.S. phenomenon.) Are 7 million subscribers by 2007 enough to entice service providers to spend billions to put the infrastructure in place? So far only British Telecom has signed up for trials.

In the third and final stage of Intel’s vision, WiMax will become an omnipresent high-speed Internet connection that turns whole cities into hotspots. In order for this scenario to play out, Intel will have to get the cellular industry to install 802.16 base stations on every tower. But cellular companies have already shelled out billions to put together their third-generation networks, and it’s unlikely that they have the stomach for another high-stakes gamble.

So while Intel continues to invest in WiMax startups and talk up the technology, there’s plenty of reason to believe that WiMax will remain little more than a dream among the visionaries at Intel.

By Om Malik

You're subscribed! If you like, you can update your settings

Related stories

  1. Sean Doherty Thursday, July 1, 2004

    Om – In using Wimax for direct-to-consumer applications (as a DSL or cable killer) RF engineering for Wimax will need to take into account issues of coverage and capacity. Wimax is theoretically great for coverage (relatively long range) but…to deliver a broadband experience with limited spectrum available, providers will need a very dense antenna infrastructure deplyed…more antennas than cell phone compaones have today. I don’t see capital being available for this anytime soon.
    Sean

    Share
  2. Alistair Stobie Thursday, July 1, 2004

    Could you tell Intel so that they don’t use their vast marketing power to distort emerging markets, such as Russia, through financing of non-commercial businesses to “prove” that WiMAx works. Meanwhile the guys making money, selling services are denied the cash they need to (really) succeed.

    Share
  3. IEEE Security and Privacy magazine is carrying a report on the security issues associated with IEEE 802.16 specs (Sub. rqd I think).

    Share
  4. Hmm.. MT just ate my link.
    Anyway here it is:
    http://csdl.computer.org/dl/mags/sp/2004/03/j3040.htm

    Share
  5. Intel Spread WiMAX FUD

    A week after I penciled my column, WiMAX Isn’t the next WiFi, Intel is out spreading more WiMAX FUD. The Feature’s Carlo Longino, today points out that Intel’s vision has more holes than all the cheese in Switzerland. As a part of the biggest hype blit…

    Share

Comments have been disabled for this post