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WiMAX Receives Huge Boost

Last week, Sprint Nextel Corp. announced it would develop a 4G nationwide broadband mobile network using the mobile WiMAX technology standard. Together with Intel, Motorola, and Samsung, Sprint Nextel will develop a nationwide network infrastructure as well as mobile WiMAX chipsets. The network will use the 2.5GHz spectrum - Sprint Nextel holds 85% of this spectrum in the U.S.

Intel will contribute by offering WiMAX solutions for Centrino Mobile Technology, Motorola will offer single-and multi-mode handset devices for connectivity, and Samsung will be a primary Mobile WiMAX infrastructure provider. Part of the decision was motivated by the FCC's terms for the Sprint Nextel merger. The company agreed to start a mobile broadband service by 2007 or lose its holding of the 2.5GHz spectrum.

The goal of this concerted effort is to incorporate WiMAX technology into a wide variety of consumer electronic devices so users can access the Internet easily and inexpensively. The company plans to deploy the services in trial markets by the end of 2007 with a goal for 100 million subscribers by 2008. According to Sprint, monthly access charges will be considerably less than the current $60/month for unlimited access to its current EVDO network.

Sprint will concurrently continue to expand its cdma 1x EV-DO network, indicating the company views the two technologies as complementary. It appears EV-DO will be focused on voice, while WiMAX will be primarily used for data.

WiMAX received a significant boost with this major announcement. With Sprint Nextel announcing a major commitment, and the backing of strongholds Intel, Motorola, and Samsung, not only does it offer great hope, but it legitimizes the technology at a completely new level. There are huge opportunities in this market, and other companies are sure to follow suit.

The key will be ease-of-use, seamless transition from 3G to 4G, and competitive pricing - both with existing 3G technologies as well as with cable and DSL. A number of recent WiMAX deployments have been heavily funded, so a key question will be how reasonable the initial consumer cost will be.

Semico believes this will significantly increase WiMAX's prospect for advancement in the U.S. Previously, Intel was viewed as a major driver of WiMAX but now, with a firm deployment commitment from a service provider, the technology has huge momentum. The evolution of WiMAX will have an impact on a number of end-use markets, including cell phones, notebook computers, future mobile consumer platforms, and wireless infrastructure.

Semico's study, "WiMAX: Wireless Expands Its Boundaries" provides more insight into this market, including 5-year forecasts, block diagrams, and semiconductor TAMs.

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