4G World Preview: Sword of consolidation hangs over mobile WiMAX vendors

As the market for mobile WiMAX technology settles, and the opportunities and drawbacks become clearer, analysts and industry players generally agree that the number of mobile WiMAX equipment vendors will be halved during the next few years.

"I don't think the market can sustain so many vendors," said Scott Siegler, a senior mobile infrastructure analyst with research and consulting firm Dell'Oro Group. "There's clearly going to have to be consolidation, partnering or exiting" among the market's current vendors.

Siegler estimates today that there are about 10 viable, active mobile WiMAX equipment vendors. Those include top players such as Motorola, Alvarion and Samsung and smaller players like Redline, Airspan and Soma Networks. While the market opportunity for WiMAX will continue to grow--Siegler estimates the space will balloon from around $700 million this year to around $2.4 billion in 2013--the number of vendors likely will shrink during that time to around four or five, the Dell'Oro analyst predicted.

The news likely surprises few. Nokia Siemens Networks in July announced [1] it would withdraw from the mobile WiMAX market by agreeing to resell equipment from Alvarion, a strategy that mirrored Nortel's abandonment of the space [2] last year.

Indeed, vendors in most maturing markets--from computing to aerospace--naturally slim their numbers as technological evolution slows and competition heats up. Examples closer to home (and reflected in mashed-up company names) are in abundance: Nokia Siemens Networks and Alcatel-Lucent. Bankrupt Nortel Networks, which is in the process of liquidating its assets, also stands as a testament to the maturing market for wireless network infrastructure.

And so it will be with the WiMAX market, according to both analysts and market players (a topic sure to be discussed during the WiMAX Business Models session on Wednesday [3].

"That's a very natural phenomenon for any market that is maturing," said Ashish Sharma, vice president of corporate communications for Alvarion, and a speaker at 4G World [4].

Of course, the evolution of the mobile WiMAX market will be dictated by demand. And it appears that demand today is not what some had hoped for. Although it was initially considered a potential competitor to LTE, today most in the industry see WiMAX primarily used as a "last mile" connection for relatively stationary computer users, likely in emerging markets that lack reliable, wired networks...Continued [5]

[5]Next page [5]

4G World Preview:
Reality check - apps and back office are a priority [6]
LTE applications, business models still up for debate [7]
Sword of consolidation hangs over mobile WiMAX vendors [8]
Backhaul to remain a challenge [9]
Solving the femtocell dilemma [10]