Integrated WiMax devices a 'misfit'

Higher-end devices such as WiMax-capable laptops, are too pricey for emerging markets, yet not appealing to developed regions, say analysts.

Devices equipped with integrated WiMax receivers are a "misfit" in the mobile broadband platform's addressable market, and lack marketing clout to take off in Asia, according to industry analysts.

Foong King Yew, research director at Gartner, told ZDNet Asia in a phone interview such devices including WiMax-embedded laptops, are out of the price range of the platform's target market--developing countries.

"The opportunities are in emerging markets, [where WiMax is touted] to fulfil these users' basic broadband connectivity needs," Foong said. "In these regions, affordability of the devices comes into play."

As a result, WiMax-enabled devices offered by operators have been limited to USB dongles and home modems, which can be purchased at a lower price, he said.

WiMax is another technology that is not differentiated in a price-competitive market.
Foong King Yew, Gartner

For example, Malaysian WiMax operator Packet One, does not offer its subscribers integrated devices but provides a choice of two modems for home or mobile use. Singapore's QMax avails modems for loan to its subscribers.

He added that hardware makers that offer integrated devices should "align their portfolios with where the prospects are", and focus on manufacturing devices for the emerging markets in Asia.

Higher-end embedded devices will not likely see mass adoption in the near term, he said.

On its WiMax commitments, a Dell Computer spokesperson would only say: "We build some, if not most, of [Dell] machines to support WiMax so customers have the flexibility to use the function."

WiMax in developed markets limited
According to Foong, prospects for WiMax-integrated devices in developed markets in the Asia-Pacific region also remain dim.

Using Singapore as an example, he said mobile WiMax competes with the country's free national Wi-Fi initiative, Wireless@SG, and cellular broadband, which local carriers are "aggressively pushing".

"WiMax is another technology that is not differentiated in a price-competitive market," he said.

Marc Einstein, industry manager at Frost & Sullivan, said the main chokepoint impeding WiMax devices from taking off is the lack of marketing clout in most of the operators that offer the wireless platform.

Most major operators have a vested interest in maintaining their cellular broadband networks, Einstein said in a phone interview. This leaves the WiMax play to greenfield operators, most of which do not have the budgets to market or bundle high-end devices to consumers, he noted.

"So getting into the [mobile broadband] game is very expensive, and the smaller pool of available WiMax devices also makes it more expensive for operators to get equipment from manufacturers," he said.

He added that industry regulators "shot themselves in the foot" when they distributed WiMax licenses. While the intention was to foster more competition by opening the market to new operators, these players are typically smaller in size and this likely prevented them from pushing WiMax in a big way, he said.

"For example, in Bangladesh, the new operators spent so much money on the [WiMax] licenses, they didn't have much left for the network after [getting the licenses]," Einstein noted.

On the recent MobileOne (M1) acquisition of QMax, Gartner's Foong said he is not "entirely convinced" of the business case for the Singapore mobile operator. While the union would give QMax more capital, M1 would still have to differentiate the WiMax service to make it appealing to consumers, he said.

The business case for WiMax in developed markets may rest entirely on the shoulders of Sprint's WiMax network in the U.S., Foong said, noting that this was one of the larger WiMax deployments in a developed market. "If that fails, it's over," he said.

At press time, Qmax and Packet One did not respond to ZDNet Asia's queries.