What's the real story when it comes to WiMAX spending?

It's difficult to get a read on how WiMAX spending is expected to fare going forward as those companies involved in the industry are reporting some mixed results.

NextWave Wireless, which, in addition to its many businesses, is developing WiMAX chips, revealed late last week that it is running out of cash (See story No. 1), and it reported a loss of $65.7 million for the second quarter, a decrease of $13.9 million or 17 percent from the first quarter.

"We are feeling the effects of a slowing global economy on our business. This has resulted in lower than anticipated sales of our 3GPP and WiFi-based network products and a delay in WiMAX network deployments that will continue to impact projected sales of our WiMAX semiconductor products," Chairman and Chief Executive Allen Salmasi said in a press release.

WiMAX vendor Redline also indicated a delay in WiMAX spending was coming during its preliminary second-quarter results announcement last month. The Canadian WiMAX vendor adjusted its revenue outlook, cutting $6 million off forecasts for the second quarter. The vendor now expects revenue to come in around $9 million for the three months ended June 30. Redline attributed the shortfall to several reasons, including "a softening in the overall demand for WiMAX products based on the current 802.16d standards as operators consider whether or not to wait for the next generation of Mobile WiMAX technologies".

The company's CEO and President Majed Sifri added: "Some prospective and existing customers have delayed their rollouts and purchasing decisions as they review the option of adopting a next generation mobile WiMAX solution. We believe that market opportunities remain strong due to the demand for broadband access, but the timing of customer decisions has become more difficult to predict."

Meanwhile, Alvarion reported record revenues and WiMAX shipments in the second quarter. The company said revenue came in at $69.7 million, a 21 percent increase from $57.6 million the previous year. WiMAX revenues in the second quarter were more than $38 million, or about 55 percent of total revenues.

"... Current customers are expanding their networks, bookings are strong, and the pipeline of potential new business is large and growing. This further increases our confidence in our ability to achieve the upper end of our target revenue range of $275 to $300 million for 2008," noted CEO and President Tzvika Friedman.

Airspan, which reported a second-quarter 3 percent decrease in revenues to $21.4 million, said "the business outlook in the second half looks improved from the recent past as more operators utilize fixed WiMAX, and mobile WiMAX increases in momentum. Given the current market perspectives, we anticipate that our full year revenue will be in the range of $90 million and WiMAX will continue to increase as a percentage of our customer wins and revenues," noted Eric Stonestrom president and CEO of Airspan.

So what's the real story about this market? Could it be that we are beginning to see a separation between the winners and losers in WiMAX?--Lynnette


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