WiMax's bright future and five hurdles to overcome

Doubters question pricing, usage model

3. How reliable is WiMax?

Consumers might not care much whether a video over a WiMax connection slows or stalls, but a business user working on a WiMax connection to find the status of an order with an angry customer certainly would be.

The question of reliability might not seem to be a concern, except that Xohm's West said Xohm will not be backed by a service-level agreement, which is a guarantee that a minimum bandwidth will be provided or the customer receives a refund. Such SLAs are commonplace today for many networks used by businesses, but not for existing cellular services typically.

"We will give you a good experience, but not SLAs," West said. Later, in an interview, he said Xohm will be "affordable ... around the needs of the individual."

Ayvazian said West's comments show that Xohm was clearly focused on consumers, not business users. "His comment surprised me," Ayvazian said. "I'd be surprised if that's Barry's final answer on SLAs," he added. "Business customers are going to demand some kind of SLAs."

Still, there could be WiMax SLAs offered under plans by other service providers in the U.S. and abroad, and the advantages for business users could be significant.

Among the advantages for a reliable WiMax business-focused service, backed perhaps by SLAs, would be the ability to provide lower-cost devices and coverage across a large corporate campus, as opposed to setting up a patchwork of Wi-Fi access points, said Gartner analyst Phillip Redman.

Eventually, the entire corporate LAN could converge with the WAN, which would create greater efficiency and lower costs, Redman added. And since a WiMax network would run over pure IP, it would provide an IT shop the ability to support more applications than it can today.

4. How fast can WiMax roll out to millions of devices?

"Mobile WiMax holds promise, but the real question is will we see actual consumer electronics devices?" asked Zeus Kerravala, another Yankee Group analyst.

Redman said Xohm's potential for success is built partly on a vision of low-cost devices that will sell for under US$100, such as an inexpensive iPhone with a larger screen. "But that will be difficult to pull off," he said.

West said 50 million or more devices will be needed in the next three years to run over the Xohm WiMax network. He said five laptop makers are already on board to provide internal WiMax chip sets for laptops, but he would not give any names. Sprint selected the infrastructure vendors for Xohm because they make mobile devices, and one of them, Motorola, even demonstrated working alpha WiMax-enabled wireless phones on the Chicago River cruise. Intel also demonstrated a laptop with an internal WiMax chip and said it is working with Nokia to provide handhelds that incorporate an Echo Peak module with combined WiMax and Wi-Fi capability, using the draft 802.11n specification.

Inevitably, there is a relationship between having enough devices running WiMax chips and drawing enough market interest that customers will buy devices running WiMax in bulk, analysts noted. It might not be all that different from the past, but with WiMax, and especially with Xohm, the timetable seems more pressing than before because of a variety of competing wireless technologies, especially in the U.S. and other developed countries.

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