WiMAX & Broadband Wireless Access Equipment Market Analysis

Questions Answered by this Report

• How many WiMAX terminals were shipped in 2008?
• How did mobile WiMAX terminal shipments compare with fixed WiMAX and pre- WiMAX terminals?
• How many WiMAX base station sectors were shipped in 2008?
• What were the market shares of the different infrastructure, CPE and silicon vendors?
• Who are the manufacturers of WiMAX customer-premises equipment (CPEs)?
• What are the different segments of the WiMAX terminal market?
• What are the various segments of the WiMAX infrastructure market?
• How many WiMAX USB dongles were shipped? What form factors were most popular?
• How popular is the VoIP feature in fixed WiMAX CPEs?
• Out of the total number of WiMAX shipments, what share of devices have embedded WiMAX and WiFi chipsets?
• Who are the application service providers (ASPs) for CPEs and base station sectors by type?
• Is the paradigm ""one vendor for both infrastructure and terminals"" still relevant?
• How has the relationship between OEMs, ODMs and operators evolved?
• What drives CPE price declines?
• What were the trends in 2008 with regards to types of devices, frequency, and prices?
• How many units will be shipped in 2009-2014? Where? What device types?
• How large will the pie become by 2014 for the base station, Access Service Network (ASN) and device markets? How many units will be shipped in 2009-2014? Where? What device types?

Executive Summary

Despite the global financial crisis and the ensuing recession, as well as the growing buzz around the 3GPP-backed Long Term Evolution (LTE) standard, the WiMAX ecosystem experienced a surprisingly healthy year in 2008, although it also witnessed the end of the WiMAX hype. Mobile WiMAX in particular has made significant inroads, although shipments did not reach the levels many had predicted.

CPEs and Mobile Devices

Over 1.2 million 802.16e-2005 compliant CPEs and embedded chipsets supporting mobility were shipped in 2008. Although MIMO mobile WiMAX devices had just been introduced into the market the previous year, new deployments in various regions worldwide created a substantial market for MIMO mobile WiMAX terminals and for infrastructure equipment. The expansion of existing WiMAX networks and the conversion of some existing networks from fixed to mobile WiMAX has also contributed to these numbers.

802.16-2004 Market Trends

The market for fixed WiMAX equipment certainly did not vanish over the past year; many operators continued rolling out infrastructure, sourcing terminals and adding new users using 802.16d-2004 technology. CPE shipments reached 880,000 in 2008.

802.16e-2005 Market Trends

US$145 was the average price of a mobile WiMAX device during 2008, and by year's end the cost had dropped much lower; USB dongles were selling at prices between US $70-60 for high volumes.

Mobile WiMAX devices shipped in 2008 were mainly indoor units. 40% of mobile WiMAX devices had embedded VoIP capabilities and about 7% had other advanced functionalities such as WiFi. USB dongles accounted for 34% of total shipments and were operating almost all in the 2.3GHz and 2.5GHz spectrums. Buyer pressure has continued to erode selling prices of mobile WiMAX devices; several operators rolled out low-end indoor units to satisfy the needs of price-sensitive consumers. 13% of shipments were simple modems with one single Ethernet port and no other functionalities.

The CPE market through ODMs remained very competitive and fragmented in 2008. Infrastructure vendors such as Motorola, Huawei, Alvarion and Samsung lead the way but smaller more specialized players gained market share. A plethora of Taiwanese and Korean vendors shipped a variety of devices (details of these ODMs are provided in the report).

Vendor Trends

In Taiwan, Zyxel, Asus, Gemtek and AWB were among most successful vendors. In Korea, Muyngmin and Modacom shipped significant volumes to Korea Telecom and many other operators around the globe. In total, Korean vendors (including Samsung) accounted for 36% of all mobile WiMAX terminal shipments. Taiwanese vendors accounted for nearly 25% of terminals shipped. Gigaset (previously Siemens) and Alvarion were the largest shippers in the EMEA region. Motorola dominated shipments in North America with a 23% market share of mobile WiMAX MIMO terminals.

3.5GHz was still the most used frequency for mobile WiMAX, with 37% of CPEs tuned to operate in this spectrum band. 2.5GHz deployments accounted for 29%, driven by network rollouts in North America, Japan and Russia. 2.3GHz networks deployed in Asia and elsewhere accounted for 31% of 2008 shipments. Vendors proved to have gained diverse market positions in the different segments. Samsung is particularly strong in the 2.5GHz and 2.3GHz bands and extremely weak in the 3.5GHz. In contrast, Motorola and Alcatel hold strong positions in the 3.5GHz market. Folowing its deployment in Malaysia, Alcatel has a strong presence in the 2.3GHz spectrum. Huawei's shipments were mainly in the 2.3 and 2.5 GHz spectrum, while Alvarion has more balanced position across the different segments.

Infrastructure

The WiMAX market continued to be extremely competitive in 2008. In terms of mobile WiMAX infrastructure, Alcatel-Lucent, Samsung, Alvarion and Motorola were the key suppliers. About 124,000 sectors were shipped at an average selling price of US$11,500 per sector - generating over US$800 million in revenues. Samsung garnered the largest portion of the established networks using its base stations, but Motorola and Alcatel dominated base station shipments in 2008. Huawei is the newest entrant and made substantial inroads with about 9% of the market share in 2008.

Chipsets

The mobile WiMAX silicon market was dominated by three vendors: Beceem, GCT and Sequans. Their market shares were almost equal as competition heightened amongst them. Intel and Runcom shipped mainly Wave 1 devices incapable of MIMO operations and with very limited support of mobility. Samsung introduced its own chipset solution and gained 7% of the market share.

Market Size Forecasts 2009-2014

Maravedis has stated in previous reports that we do not expect WiMAX to become a ""3G killer"" in the near future. This remains true in light of the recent technical and commercial wins by LTE.

Operators who adopt WiMAX multimode offerings are not pressed into either replacing or displacing service to customers. WiMAX chipsets have finally become embedded into laptops and handhelds, used by a few leading operators such as Scartel.

The fundamental question about WiMAX is this: can it ramp up to volumes that enable it to compete in a wireless world ruled by huge volumes of cellular phone sales? WiMAX and future wireless networks that aspire to offer 4G services will attempt to become unified communications systems that fit diverse markets and have very different sets of customers and requirements. The common architecture is supposed to result in an overall advance in technology and a reduction in costs, the so-called ""virtuous circle"" enabled by a large ecosystem.

A term that has filtered through discussions of WiMAX is the tipping point - where WiMAX momentum skyrockets due to a nexus of contributing factors. The many pieces to the puzzle include:

• Gaining access to sufficient spectrum for wide-area coverage and roaming.
• Assembling large numbers of component core systems, device suppliers and ODMs to fuel creative development and provide users with options for diverse markets.
• Fostering an IPR environment that lowers the barriers and risks.
• Creating an open system that leverages developments in other industries including Internet, PC and server software, network systems and OS, service industries including voice phone, entertainment, advertising, and unified messaging services.