NextWave will it survive?

Implications: 1. There is a lot of noise about WiMax being 4G technology for mobile devices including cellular phones. While this is probably true Wimax standard is not finalized yet and this fact makes the technology developers a risky companies to invest in. 2. NextWave is spending huge amount of money on technology development ranging from ICs, though the prototype development platforms for both industrial and consumer markets. In addition,  NextWave is buying frequency spectrum all around the world. In my opinion this is very risky strategy because WiMax will be rolled-out in 2009-2010 if not later in some countries but the interest payments on company loans to have to be satisfied in the meantime. 3. In addition, the growth of the company is tremendous. They need more and more people to cover all the activities they are involved in and there is question in my mind of controlling the growth.

Analysis:  NextWave is risking a lot by embracing too many activities that are only slightly related; such as purchasing and managing frequency spectra in different countries, developing products for consumer market and industrial base stations. The development includes everything from chipset to completed products. In my opinion this is a very big gamble for a startup company to undertake. What magnifies the risk is that the technology is years away from massive deployment and wide market acceptance. Can the company control such a big portion of a value chain? I think not. It is amazing how fast the company is growing, especially at this early stage of technology development. Later on, the company growth will have to be accelerated even more, and expansion has to be multiplied by the number of distinct products and services NextWave plans to provide. It is a tremendous task. This reminds me of a way the conglomerates were operating in the 1980's. Today, even the biggest and richest companies are narrowly specializing and shedding off the unrelated services. Erisccson, Qualcomm etc. dispose of their infrastructure development and focused on cell phones. I might be wrong but the hard times will come to NextWave.