WiMAX Is 3G But Still Outside Looking In!Wednesday, October 24, 2007
This week, the ITU decided that WiMAX qualifies to be added to its list of IMT-2000-compliant (3G) wireless technologies and the WiMAX community is celebrating. I guess no one remembers Gary Forsee, now ex-CEO of Sprint, touting WiMAX as a 4G technology when Sprint announced its selection of WiMAX for its new network on 2.5 GHz.
In my Commentary "Pricing Models Need to Change" dated June 12, 2007, I wrote about Sprint and Intel believing WiMAX chipsets will begin appearing not only in notebook computers, but in Ultra-Mobile Devices (UMDs-why can't someone come up with a better name?) as well as consumer devices. It is logical, they say, to include WiMAX into these devices and this will, of course, drive the adoption of WiMAX worldwide. I stated that I believed someone else would offer a universal chipset based on providing GSM/UMTS and CDMA/EV-DO on a number of different radio bands and that this would enable notebook, UMD and consumer companies to build in a single chipset to have broadband wireless capabilities. I further stated that even if this universal chipset cost a little more than a WiMAX chipset, it would be favored by vendors because it would enable them to build a single device, sell it anywhere in the world and let customers activate it on any commercial wireless network that supports GSM/UMTS or CDMA/EV-DO.
On Tuesday, October 23, 2007, Qualcomm announced just such a chip. It is calling this chip Gobi, coined from Go and Be, symbolic of travel, expedition and vast coverage, and it suggests access anywhere and ultimate mobility. Even if you don't care for the name, the idea should appeal to you. You will be able to purchase a notebook computer with embedded wireless broadband (and GPS), and no matter where you are in the world (with the exception of Japan for now), you can turn it on, register on a network and have instant access to wireless broadband.
This is an amazing chipset designed from the ground up for notebooks, UMDs and consumer devices―not a chipset adapted from a mobile phone. It employs a software modem and the radio technology enables sharing components between the radios. In terms of wireless frequencies, it provides coverage on 850, 900, 1800, 1900 and 2100-MHz bands and supports the appropriate technologies on each band: CDMA 1x/EV-DO/EV-DO Rev A and GSM/GPRS/EDGE/HSDPA/HSUPA. There is also a separate GPS receiver.
If you put all that on a chart, you will see that the various combinations of radio coverage and technologies virtually blanket the world.
As far as the price differential goes, Qualcomm is not yet talking about pricing, at least to the analyst community, but I believe that if there is a delta between a WiMAX chipset and the Gobi chipset it won't be significant. In fact, under certain circumstances, the Gobi solution may actually make the notebook vendor more money in the long run. According to numbers I am hearing, notebook companies really like selling notebooks with wide-area broadband wireless because the amount of money they make from the activation is more than they make for selling five notebooks. If this is correct, it doesn't take a math wizard to understand that having a single radio module that works virtually anywhere means notebook vendors can build a single model of a product and ship it anywhere in the world knowing it can be activated on any of today's commercial networks.
The Gobi chipset is slated for a 2008 release, which, I believe, is sooner than Intel is planning to release its WiMAX chipset-although there are other companies with WiMAX or near-WiMAX chips already in the market. And as we add the AWS spectrum, 700-MHz spectrum, LTE and UMB to the mix, I expect the Gobi chipset to keep up and provide for these new bands and capabilities as well as full backward compatibility.
Let's take a look at the notebook business today. The numbers I am using were provided by Qualcomm, but I am confident they are accurate, at least from a Qualcomm chipset perspective. In July of 2006, there were 45 different notebook models with embedded broadband, either EV-DO or UMTS modules, from nine notebook companies and only seven networks had approved embedded wireless for notebooks. In July of 2007, there were 157 models from eighteen vendors, and the number of networks with approved embedded wireless for notebooks has risen to twenty (based on Qualcomm's and network operators' numbers).
The notebook market will never be as big as the handset market, but it is a different marketplace. Notebooks include a wireless module, antenna system and software and are not designed around the wireless components. Further, the module cost in the overall bill of materials (BOM) is a much smaller percentage in a notebook when compared to a handset. As for pricing of the modules, Wi-Fi began to be built in when the cost of the module dropped below $40. When it dropped below $30, it became a standard in most notebooks. Will the module including the Gobi chipset achieve similar prices? Qualcomm is not saying, but because notebook vendors are paid for each activation, which is sometimes more than they make on the notebook, you have to believe they might be willing to be creative in their pricing and the cost of a module, which I suspect will be higher to start, will not be a significant a factor.
Starting next year, chances are pretty good we will see a wide variety of notebook models that contain this worldwide broadband module. When you purchase your notebook, you will turn it on and, as the machine is being set up, it will walk you through the set-up of the wireless portion, help you decide on a network and assist you with network sign-up and registration. You will be able to sign up as part of a corporate account, as a small company or an individual for unlimited service at the going rate (depending on the length of the contract you sign) or on a per-day basis.
According to the network operators I talked with, there is a high probability of a per-day customer signing up for monthly service after a few days of use. Also, having the daily rate available means I could be a Verizon customer and use EV-DO Rev A in the U.S. on an unlimited (within reason) data package, and when I travel to the UK I could sign up for daily use of UMTS/HSPA from one of the network operators there-which, I am willing to bet, would be cheaper than paying roaming charges. The universal wireless modem would make this possible―my current notebook would not normally work on UMTS.
The Gobi is also an indication that Qualcomm, as well as others, understands that notebooks are only the first of many devices that can benefit from this type of world chipset. There are also UMDs and, of course, consumer appliances. I still have a problem with the principle of these smaller devices providing us with the same Internet we have on our desktop, but at least they will have a universal broadband chipset in them.
On the handset side, we are also seeing an uptick in world phone products. BlackBerry CDMA/GSM devices are selling very well, and other vendors that had been ignoring this market are starting to take another look. It still amazes me that some handset makers only build phones on the "world standard" GSM/UMTS because, as they say, that represents 70% of the total networks in the world. I contend that the other 30% are pretty important, and now with these new chipsets we should be seeing more device choices on the market in the next year or so.
Another benefit is that these world chipsets will give network operators new freedom when making decisions about technology going forward (where the technology is not mandated by the government) and they will make things easier for operators with networks on both technologies.
Qualcomm, Intel and most of the companies involved in mobile computing and wireless all agree on one thing: Embedded wide-area broadband is the way to go for notebooks, UMDs and consumer appliances. Where they differ relates to what will be included on the chip-multiple technologies on multiple bands that can be used on virtually 100% of today's commercial networks, or a single technology for a limited number of networks.
Andrew M. Seybold