WiMax Portable Broadband: Awaiting Ubiquitous Multi-media Applications

Includes: ALVR, S
by: Kishore Jethanandani

Wireless networking technologies, in the past, had trouble making headway because very few applications, especially multi-media applications, could be supported with their bandwidth. Consumer frustration was aggravated by spotty coverage of the networks and the consequent interruptions in signal transmission. WiMAX, or broadband wireless which matches or exceeds the bandwidth of available DSL services, can support multi-media applications better than the current 3G technologies. In addition, WiMAX can transmit signals over much longer distances where neither cell phones nor hotspots can reach.

Mobile broadband is most valuable when Internet applications can be accessed anywhere. In the current environment, consumers have to instead look for hotspots. WiMAX, by contrast, has no such limitation as it has a range of 3-10 miles in densely populated metropolitan areas. Its many base stations can also route traffic around obstacles, such as buildings, before they hand over data to national networks. Consumers could be watching their favorite TV programs in a park; devices and software from Sling Media allows customers to access video content when they want it. They could be listening to traffic reports while they are driving a car. Alternatively, they could catch up with the latest in baseball from mlb.com.

Sprint’s (NYSE: S) business model for WiMAX is counting on revenues from consumer and enterprise applications for success. The recent agreement between Google and Sprint to offer location based services on WiMAX is a pointer to developments in this space. A growing number of portable consumer devices for music, video, GPS and gaming could be more valuable if they could access content from anywhere.

Increasing use of sensors, such as RFIDs, for gathering data and its aggregation at a central point requires the seamless hauling of data best achieved with high bandwidth networks. WiMAX gains an edge over 3G for data rich applications; its chipsets for consumer devices like MP3 players would be $3 compared to $30 for 3G devices for comparable scales of production according to estimates of Diamond, a management and technology consulting company.

Successful deployment of mobile broadband applications depends critically on integrating software with telecommunications networks and the devices that receive the signals. Consequently, specialists in WiMAX technology, such as Airspan and Alvarion will succeed when they work with companies like IBM to set-up integrated systems.

Alvarion (Nasdaq: ALVR), an Israeli company, is focused on supplying equipment not only for WiMAX networks (basestations) but also a platform to integrate applications for handheld devices including consumer devices. Its open architecture allows network providers to choose their preferred vendors for devices for applications. Alvarion’s 4Motion package is meant to get networks ready to offer mobile TV, online gaming, video conferencing, virtual private networks, location based services, etc. MobiTV, for example, offers video content by leveraging the 4Motion platform. Till date, much of its revenue gains have been from networking WiMAX product called BreezeMax. Future growth depends critically on the success of 4Motion. Alvarion’s recent alliances with IBM and Hitachi, for their system integration skills, suggest where it is going in the future.