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NEWS
WiMAX
is not WiFi
Currently, the inclusion of mobile
WiMAX chips in laptops is often cited as a key indicator of future mobile WiMAX
success. Advocates of mobile WiMAX point to the impact of WiFi-equipped laptops
and how this use created the demand for increasingly higher annual WiFi
shipments. The same impact is predicted for WiMAX equipment as well as carrier
acceptance for WiMAX in the near future by these same advocates.
In reality, the only similarity between WiFi and mobile WiMAX is that both are what they are, wireless technologies. But to render any comparison between the two beyond that simple fact and to project market success from such comparisons is risky at best. Understanding why WiFi actually succeeded and how the WiMAX and WiFi markets differ is crucial to refuting dubious assumptions regarding the impact of laptop WiMAX.
Why WiFi has Blossomed
WiFi gained widespread
acceptance due to standardization, a multitude of applications and resulting
price point reductions. But above all else the widespread acceptance was
due to the proliferation of consumer broadband and the subsequent desire of
consumers to access that connection from multiple computers within their home. Inclusion of WiFi within laptops, which is
often cited as a major contributor to the success of WiFi, came after growth
patterns were already established.
The initial success and much of its subsequent growth of WiFi use is a product of a meaningful application utilizing WiFi access, i.e., the use of portable broadband within the house or small business. The success was not due to Intel’s decision to promote WiFi within laptops, although marketing never hurts.
A World without Cable/DSL
Eliminate widespread consumer
of adoption of DSL and cable modems from the equation and a very different history
of WiFi would have ensued. Would consumers care about laptop WiFi if they
lacked broadband connections in their home or small business? Not likely.
But wait, surely both consumers and businesses would still employ those WiFi equipped laptops to access hot spots, right? Possibly, but one must factor into the equation the cold fact most hot spots are backhauled by consumer grade DSL and cable modems. So, once again, the outcome may have been very different without the widespread availability and acceptable price points for DSL or cable modem access.
The Differences
WiFi is ultimately a consumer
accessible technology while WiMAX is a carrier platform. Consumers and businesses
are building WiFi infrastructure and operating it in unlicensed frequency bands
and they can do so by purchasing a sub $200 WiFi kit at a local electronics
retailer. Purchase of a laptop with WiFi may actually stimulate further
deployment of WiFi routers and other infrastructure, typically to share
broadband access. It may also stimulate owners of that device to employ hot
spots which have been built out by consumers, municipalities, coffee shops,
airports, etc and which are typically backhauled by inexpensive DSL/cable
technologies.
In contrast, mobile WiMAX base stations are priced well beyond the means of consumers and small businesses at thousands or even tens of thousands of dollars, for a macro base station. The most attractive bands for WiMAX use, which are 2.5 GHz and 3.5 GHz, are licensed to wireless carriers so to use these networks, most likely, you will have to wait for them to be built and then pay monthly for usage.
In addition, unlike WiFi, WiMAX has no killer app. The benefits of mobile WiMAX to consumers or carriers remain unclear as does the actual performance of mobile WiMAX. Yes, carriers want an IP network and mobile WiMAX can provide that, but numerous simulations suggest a minimal to negative capacity advantage compared to HSDPA/HSUPA unless MIMO, which carriers are reluctant to accept due to the cost of placing more antennas on towers, is included on the WiMAX side and excluded from WCDMA (not exactly a fair fight). Questionable performance gains over existing technologies suggest that an economic incentive to deploy or use mobile WiMAX is also MIA at this time.
Laptop WiMAX Advantage
So what advantage does
placing WiMAX in laptops bring to the market? It reduces the cost of subscriber
equipment subsidies and it could place a sizable quantity of user devices in
circulation. These attributes enhance the value prospect of mobile WiMAX to carriers and they should drive down the
cost of mobile WiMAX devices, which is also attractive. However, we must keep
in mind that deployment of national networks requires a mass market to
depreciate cost. Mobile markets are defined by phones not laptops. Widespread
inclusion of mobile WiMAX in mobile phones is the more important metric.
In Summary
Mobile WiMAX will not enjoy
the same lift from its inclusion in laptops that WiFi enjoyed and that latter
influence has been overstated. Carrier investments in previous technology
migration paths, questionable performance advantages of WiMAX and high risk
aversion amongst carriers are major road blocks to mobile WiMAX success, as is
the carriers' reluctance to deploy new technologies. Placing WiMAX in a laptop will not overcome
these obstacles nor can it empower consumers as WiFi has done.
© 2008, Visant Strategies