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WiMax Equipment May Top $3B by 2010

WiMax equipment could become a $3 billion market by 2010, snuffing out companies pushing proprietary technology, according to a new report from In-Stat. However, to dominate the long-range wireless landscape some challenges must be overcome.

Although pre-certified WiMax devices accounted for just $42 million last year, a combination of certification and inexpensive consumer products could mean a $3 billion market by 2010, In-Stat's analyst Norm Bogen wrote in a report about the market.

Bogen said he expects WiMax certification to happen in March, capturing market share from companies that have offered proprietary alternatives. Certified WiMax will mean the end for proprietary products with companies and wireless ISPs migrating to the approved version.

However, there are two unknowns that could change the outcome of what In-Stat terms an "aggressive" forecast. In December, In-Stat warned of "tremendous hype surrounding WiMax."

In order for WiMax to achieve the $3 billion estimate, the cost of subscriber units -– modems -– must fall from the current $500 to $100. While Bogen believes the price drop will happen over time, the change depends on what the analyst terms a Catch-22. For lower prices, WiMax chips must be produced in greater numbers. For production to increase, equipment prices must fall.

Another challenge possibly even greater is harmonizing worldwide spectrum in order to allow all WiMax devices to work -- no matter where they are deployed. Unless such spectrum can be harmonized and one radio band used for WiMax in the U.S., Europe and Asia, the wireless technology will never reach the economy of scale needed.

"The biggest challenge will be worldwide harmonization of spectrum sufficient to allow manufacturers to mass-produce equipment at even lower prices," according to In-Stat.

South Korea this month awarded three licenses for its WiBro technology, a home-grown version of WiMax.

Mobile WiMax -– or 802.16e, which could be embedded in phones and laptops, may lead the way for WiMax adoption, according to In-Stat. The market for mobile WiMax includes Intel, carriers and others. "Though traction in the 802.16-2004 [Fixed WiMax] market will be important, the real success of WiMax will depend on the much larger 802.16e market," according to the analyst firm.

Several WiMax announcements will be made from service providers in 2006, Bogen believes. Bell South announced in 2005 a pre-standard WiMax service in Athens, GA. AT&T is expected to offer a similar service this year. The findings are included in a report entitled "WiMax: Challenging the Status Quo."