Motorola WiMAX a boost to NSN's Portfolio - But Does it Matter?

Motorola's recent sale of their network equipment business to Nokia Siemens Networks for an estimated $1.3B is a good addition to NSN's WiMAX portfolio. Motorola also has a reasonable presence in CDMA networks but I think the WiMAX technology was the primary reason for NSN's interest. The combination of the two pushes NSN into the #2 spot for wireless infrastructure in the US, a market where it has previously had little traction.

WiMAX itself is at an interesting point in its evolution. It had a time to market advantage relative to other high speed 4G technologies such as LTE. Sprint, with the help of its partner Clearwire, recently announced seven new cities with 4G WiMAX service, bringing its total of U.S. cities covered to 43. Analysts have predicted solid growth of WiMAX over the next five years (see ABI Research chart). Still, handsets that support WiMAX are fairly limited. Sprint offers one device at this time - HTC's Evo 4G. At least the Evo 4G is selling so well that demand is exceeding supply.

That said, the jury is still out on the long term success of WiMAX. Global subscriber adoption of WiMAX simply hasn't met expectations. Although revenue was up in Clearwire's most recent quarter, they reported a loss of $94M. In November 2009, the operator needed a fund infusion of $1.5B to turn itself around. Even in emerging markets, WiMAX uptake has been slower than expected. And with 4G LTE deployments hitting the market by the end of 2010, the window of 4g exclusivity that WiMAX has enjoyed is rapidly closing. It will be interesting to see how the two technologies co-exist (or not) in the years ahead.