Is 2008 the Year for WiMax?

Implications: The strongest supporter of WiMax Intel has announced that it will embed its WiMax technology in the processor dubbed Montevina in May of 2008. Intel intends to establish their own Intel-based handsets as well. The biggest US WiMax operator Sprint Nextel also announced that they will deploy WiMax to cover about 30ish cities at around the same time. Sprint Nextel has selected Intel, Motorola and Samsung as its vendors. Motorola recently announced its WiMax chipset for handheld devices which is scheduled to debut beginning of 2008. Samsung has already gained two years of experience through the deployment of WiBro (Korean version of WiMax) with large Korean operators.  NextWave will release baseband chip with an integrated WiMax/Wi-Fi system-on-chip. Its WiMax interface will meet global TDD and FDD spectrum allocations from 1.7-3.8 GHz. 

Analysis: 2008 will be a critical year for the WiMax community.  The ecosystem is forming for the multi-vendor and interoperable end-to-end solution including infrastructure and handsets. One or two large deployments of WiMax will probably happen in 2008. On the handset side however, the price, performance and variety of WiMax-enabled devices will be struggling to catch up with the infrastructure deployment.  Typically device maturity curve lagges behind infrastructure by about 12 months.  So Sprint Nextel's model probably will have to be somewhat "Build it and hope they will come".  Consumer demand and the business model have yet to be proven.  Intel will be a big driver for consumer adoption.  The key question is whether Intel will charge for the WiMax chip separately or not.  Users had to pay additional $100+ for the WiFi chip 7-8 years ago.  But unlike WiFi, users can't just go to Office Depot and buy the basestations.  Users will have to wait for Sprint Nextel or Clearwire to deploy basestations, which creates a catch 22 problem.  In my view, Intel should include the cost of WiMax chip in the processors.  This will accelarate adoption significantly and help everyone in the value chain.