WiMax has made a name for itself in developing countries, where consumers don’t have a landline alternative, but in the U.S., Terry Norman, Senior Analyst at Analysys Mason, argues that there won’t be enough business to justify sustained investment from companies, such as Cisco Systems (NSDQ: CSCO), Intel (NSDQ: INTC) and Motorola (NYSE: MOT).
The major factors he points to are: Clearwire’s subscriber growth has been disappointing; Clearwire (NSDQ: CLWR) investors, such as Google (NSDQ: GOOG) and Comcast (NSDQ: CMCSA), have already written off billions of dollars invested; and other North American and European operators are moving to LTE, rather than to WiMAX.
None of these conclusions represent anything new. But because of them, the report concludes that without further WiMax deployments in developed countries, the vendors involved in WiMax will have to consolidate in order to be profitable. The analyst tracked more than 500 WiMax deployments around the world, and kept an eye on key features, including: launch date; key vendors; network status; and geographical coverage.
Norman writes: “We doubt that the developing market offers sufficient growth potential and size to sustain continued investment from such heavyweights as Cisco Systems, Intel and Motorola without additional sales in the developed markets. But in the developed markets of Europe and the USA, we see some early signs of a difficult future for WiMAX.”
While 500 sounds like a lot, they consider “all deployments are opportunistic and/or in developing countries, and we expect this trend to continue.” However, you can also say it’s early days. Clearwire should benefit from these early deployments when it comes to costs, and it’s just yet to begin significant WiMax roll-outs. Subscribers will come more easily once they have a critical mass of deployments, and their reseller partners kick into high gear with promotions. In fact, in the fourth quarter, Clearwire expects to add more subscribers than it did during the first three quarters combined.

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