Affordable CPE Equipment Will Drive WiMAX Into Emerging Markets

March 12, 2008
In the last two years, the fixed/portable broadband-wireless-access (BWA) equipment market (sub-11-GHz) more than doubled. According to Maravedis, it grew to $1.2 billion in 2007up from $562 million in 2005. Despite the doubling of the ...

In the last two years, the fixed/portable broadband-wireless-access (BWA) equipment market (sub-11-GHz) more than doubled. According to Maravedis, it grew to $1.2 billion in 2007up from $562 million in 2005. Despite the doubling of the market, the success of WiMAX depends on reaching a critical mass in underserved and developed markets. The higher-volume production of chips, antennas, and other components must occur. Such production will drive down the price structure of the supply chain for WiMAX products while increasing market uptake.

An example is the price of integrated circuits (ICs) and other components used in customer premise equipment (CPE) and embedded products. Those prices will decrease rapidly as the volume of production (now largely fabless) shifts from the hundreds of thousands to the millions of units under long-term contracts. This trend will make CPEs more affordablea key enabler for WiMAX to succeed in developing countries with low broadband penetration. To derive BWA market sizes, Maravedis collected CPE and base-station (or sector) shipment figures from the top 24 equipment vendors and was able to present an estimate of shipments for CPEs and base stations among all sub-11-GHz equipment providers in the industry (see figure).

In the past five years, the average annual growth rate was about 50 percent. In 2007, the CPE represented no more than 14 percent of the total shipments. Equipment vendors and service providers are waiting for that growth to reach the three-digit numbers that will translate into massive adoption of WiMAX technology. For these volumes to materialize, the industry needs major service providers to spend billions in WiMAX networks and marketing planswhether for a fixed/portable play like BSNL/VSNL in India or a 4G network. For more information, go to www.maravedis-bwa.com.

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