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WiMAX Carriers Try to Differentiate Services

Clearwire, the U.S. wireless service provider, has announced that it had received FCC approval for a WiMAX laptop card. Motorola will manufacture the card for Clearwire, which is expected by Clearwire to be available during the second half of 2007.

In-Stat believes that there are two significant developments coming from this announcement. First, Clearwire appears to be starting to take steps to differentiate its service from other existing broadband providers. With portability, Clearwire can offer a broadband service that breaks down the artificial wall between the home and away Internet experience.

This gives Clearwire a way to differentiate itself from current service offerings which are either strictly for a fixed or portable experience. Service differentiation is important as Clearwire needs to find a way to win customers away from incumbent broadband providers.

Generally there are only two ways to do that -- either be cheaper or be different. For a company that has yet to turn a profit and is still building out its initial network, lowering prices is not a wise approach. Being different, which portability will do for Clearwire, can be much more profitable.

The other significant development from the recent announcement comes from Motorola's WiMAX efforts. Motorola has positioned itself as a key infrastructure vendor to two of the most high profile WiMAX deployments in the world, Sprint and Clearwire.

All the while the company has yet to gain any significant market share in WiMAX equipment. Usually marquee wins go to dominant players in a market, however with WiMAX that has not been the case. In-Stat believes it indicates how the WiMAX world is about to change.

While there are hundreds of WiMAX deployments, most have been small in scope using equipment from vendors specializing in the technology. With the Sprint and Clearwire commitment to deploy WiMAX networks, the infrastructure market will quickly eclipse the $170+ million mark reached in 2006.

Also, the vendors that dominated market share in 2006 will soon see themselves replaced by more traditional telecom equipment vendors, such as Motorola. The original equipment pioneers of WiMAX -- Alvarion, Aperto, and Redline have yet to win a role in either Sprint's or Clearwire's deployments. However, all is not bad for those companies -- In-Stat expects they will continue to grow their revenues, even as their market share decreases.

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