WiMAX for the Minimum

Discussion in 'Wireless Networking' started by Knowing About, Aug 17, 2006.

  1. IT TAKES A healthy dose of blind faith to invest the hundreds of
    millions - and in some cases billions - of dollars required to get
    groundbreaking technologies off the ground. As far as these leaps of
    faith go, Sprint Nextel (S), Intel (INTC) and Motorola (MOT) seem to be
    jumping off of a springboard when it comes to the wireless broadband
    service known as WiMAX.

    Don't get me wrong. I'm not pooh-poohing WiMAX's prospects. It
    holds the promise of revolutionizing the way people access the Internet
    and could provide these tech players with a healthy return in the
    process. The true money maker here is expected to be mobile WiMAX (as
    opposed to "fixed" WiMAX, which I'll explain later) that will
    offer high data rates at a range of several miles. As long as you're
    in your service provider's coverage area, it'll allow you to have
    high-speed wireless Internet service that travels with you and is
    ubiquitous across all of your devices, including your computer at home,
    your laptop in the airport and your cellphone.

    Sprint recently said it's investing up to $3 billion over the next
    two years to create a mobile WiMAX network. The nation's
    third-largest wireless service provider is betting that the "4G
    services" that WiMAX would allow it to offer customers could prove to
    be formidable competition to the slower data rates offered by the 3G,
    or third generation, networks of Verizon Wireless and Cingular. Intel,
    which unveiled its Rosedale WiMAX chipsets last year, is investing
    millions in all sorts of WiMAX ventures. Most notably, it coughed up an
    added $600 million for Clearwire, the independent wireless broadband
    venture founded by wireless guru Craig McCaw. (McCaw is best known for
    founding McCaw Cellular, which later became AT&T Wireless and is now
    part of Cingular.) Motorola put $300 million into Clearwire. While
    Sprint will offer WiMAX nationwide, Clearwire will provide WiMAX
    service in smaller markets such as Klamath Falls, Ore., and Amarillo,
    Texas.

    No doubt these are large endorsements from prominent industry leaders.
    But with any technology that has yet to be tested in the marketplace,
    there are some risks involved and some big money to be lost if it
    doesn't pan out the way everyone hopes. However, I have a hard time
    believing that Sprint and Intel will let WiMAX fail. "The price of
    getting a network started is a drop in the bucket compared to the
    amount of money they can make," explains Donna Carlson, principal
    analyst at Scottsdale, Ariz.-based wireless research house Sky Light
    Research. Don't expect Sprint, which says it will commercially launch
    its WiMAX network in 2008, to see that big payoff until 2010 though,
    says Carlson.

    For those investors who have as much faith as Sprint and Intel but not
    as much patience, I think the best way to invest in WiMAX right now is
    to follow the money trail. What Sprint and Intel are putting those
    billions of dollars into are the base stations, devices and other
    equipment that'll make these networks work. Wireless device makers
    Motorola and Samsung have gotten on board with Sprint and are poised to
    profit down the road. But there is one smaller infrastructure company
    that's also worth keeping an eye on.

    Alvarion (ALVR) is an Israeli company that makes wireless broadband
    network equipment. According to Sky Light Research, Alvarion currently
    owns a formidable 81% of the WiMAX equipment market. Right now that
    market revolves around gear for "fixed" WiMAX networks that connect
    individual WiFi hotspots or provide Internet access in lesser-developed
    locales where the infrastructure for DSL or broadband connections is
    nonexistent or spotty.

    In its latest second quarter, Alvarion reported $50.5 million in
    revenue and, on a pro-forma basis, broke even. Sales of WiMAX equipment
    accounted for $17 million of the top line, a 26% increase from the
    previous quarter (other revenue comes from the sale of cellular mobile
    network equipment). The company is also showing improvements in
    controlling costs - a problem area in the past - with gross margins
    climbing to 49.0% from 46.1% in the first quarter, noted Merriman
    Curhan Ford analyst Kevin Dede in an Aug. 2 research report.

    Dede, whose firm makes a market in Alvarion's shares, has a Buy
    rating on the stock. The analyst expects the company to report a loss
    of five cents a share on revenue of $208.5 million this year and
    projects that sales will grow close to 23% in 2007 to $256 million with
    a profit of 10 cents a share. "We believe Alvarion's sales should
    show steady sequential improvement through the balance of this year and
    next as WiMAX deployments spread around the world," the analyst says.
    More wimax news and information can be provided on
    http://www.knowingabout.com/wimax/, you can also find about wifi and
    IEEE 802.11, Wimax phones , sprint wimax and connection of Wimax with
    VoIP market can also play important role in development of WiMax.

    While Alvarion continues to build its fixed WiMAX presence, it's
    already developing its next generation of WiMAX equipment to help build
    out the emerging mobile WiMAX networks like the one Sprint wants. The
    company, which was one of the first to market with a WiMAX product,
    should continue to have a technologically leading edge over equipment
    vendors that are just entering the market.

    Even so, investors should know that it's not necessarily going to be
    a smooth ride. Competition is going to get much stiffer as the testing
    and certification of mobile WiMAX equipment begins next month. "You
    can expect to see some of the major equipment vendors like Nokia (NOK)
    and Motorola jumping into the market once the mobile WiMAX standard has
    been settled," says Peter Bell, a senior analyst at telecom research
    firm TeleGeography Research in Washington, D.C., who tracks WiMAX
    deployments across the globe. Sky Light's Carlson believes the first
    mobile WiMAX product certification will come early next year.

    Being in the middle of such an emerging hotspot is why I wouldn't be
    surprised if Alvarion entertains a takeover offer or two from one of
    the large equipment vendors like Nokia or Nortel Networks (NT) that
    want to get in on WiMAX quickly. Over the course of the last 12 months,
    Alvarion's shares have traded in a rather wide range of $4.92 to
    $10.96. The stock changes hands at around $7 now. Alvarion could prove
    to be a worthwhile leap of faith for investors or an acquisitive
    equipment maker.

    For Further Information and news : http://www.knowingabout.com/wimax/
     
    Knowing About, Aug 17, 2006
    #1
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    0








    0

    "Knowing About" wrote:

    > IT TAKES A healthy dose of blind faith to invest the hundreds of
    > millions - and in some cases billions - of dollars required to get
    > groundbreaking technologies off the ground. As far as these leaps of
    > faith go, Sprint Nextel (S), Intel (INTC) and Motorola (MOT) seem to be
    > jumping off of a springboard when it comes to the wireless broadband
    > service known as WiMAX.
    >
    > Don't get me wrong. I'm not pooh-poohing WiMAX's prospects. It
    > holds the promise of revolutionizing the way people access the Internet
    > and could provide these tech players with a healthy return in the
    > process. The true money maker here is expected to be mobile WiMAX (as
    > opposed to "fixed" WiMAX, which I'll explain later) that will
    > offer high data rates at a range of several miles. As long as you're
    > in your service provider's coverage area, it'll allow you to have
    > high-speed wireless Internet service that travels with you and is
    > ubiquitous across all of your devices, including your computer at home,
    > your laptop in the airport and your cellphone.
    >
    > Sprint recently said it's investing up to $3 billion over the next
    > two years to create a mobile WiMAX network. The nation's
    > third-largest wireless service provider is betting that the "4G
    > services" that WiMAX would allow it to offer customers could prove to
    > be formidable competition to the slower data rates offered by the 3G,
    > or third generation, networks of Verizon Wireless and Cingular. Intel,
    > which unveiled its Rosedale WiMAX chipsets last year, is investing
    > millions in all sorts of WiMAX ventures. Most notably, it coughed up an
    > added $600 million for Clearwire, the independent wireless broadband
    > venture founded by wireless guru Craig McCaw. (McCaw is best known for
    > founding McCaw Cellular, which later became AT&T Wireless and is now
    > part of Cingular.) Motorola put $300 million into Clearwire. While
    > Sprint will offer WiMAX nationwide, Clearwire will provide WiMAX
    > service in smaller markets such as Klamath Falls, Ore., and Amarillo,
    > Texas.
    >
    > No doubt these are large endorsements from prominent industry leaders.
    > But with any technology that has yet to be tested in the marketplace,
    > there are some risks involved and some big money to be lost if it
    > doesn't pan out the way everyone hopes. However, I have a hard time
    > believing that Sprint and Intel will let WiMAX fail. "The price of
    > getting a network started is a drop in the bucket compared to the
    > amount of money they can make," explains Donna Carlson, principal
    > analyst at Scottsdale, Ariz.-based wireless research house Sky Light
    > Research. Don't expect Sprint, which says it will commercially launch
    > its WiMAX network in 2008, to see that big payoff until 2010 though,
    > says Carlson.
    >
    > For those investors who have as much faith as Sprint and Intel but not
    > as much patience, I think the best way to invest in WiMAX right now is
    > to follow the money trail. What Sprint and Intel are putting those
    > billions of dollars into are the base stations, devices and other
    > equipment that'll make these networks work. Wireless device makers
    > Motorola and Samsung have gotten on board with Sprint and are poised to
    > profit down the road. But there is one smaller infrastructure company
    > that's also worth keeping an eye on.
    >
    > Alvarion (ALVR) is an Israeli company that makes wireless broadband
    > network equipment. According to Sky Light Research, Alvarion currently
    > owns a formidable 81% of the WiMAX equipment market. Right now that
    > market revolves around gear for "fixed" WiMAX networks that connect
    > individual WiFi hotspots or provide Internet access in lesser-developed
    > locales where the infrastructure for DSL or broadband connections is
    > nonexistent or spotty.
    >
    > In its latest second quarter, Alvarion reported $50.5 million in
    > revenue and, on a pro-forma basis, broke even. Sales of WiMAX equipment
    > accounted for $17 million of the top line, a 26% increase from the
    > previous quarter (other revenue comes from the sale of cellular mobile
    > network equipment). The company is also showing improvements in
    > controlling costs - a problem area in the past - with gross margins
    > climbing to 49.0% from 46.1% in the first quarter, noted Merriman
    > Curhan Ford analyst Kevin Dede in an Aug. 2 research report.
    >
    > Dede, whose firm makes a market in Alvarion's shares, has a Buy
    > rating on the stock. The analyst expects the company to report a loss
    > of five cents a share on revenue of $208.5 million this year and
    > projects that sales will grow close to 23% in 2007 to $256 million with
    > a profit of 10 cents a share. "We believe Alvarion's sales should
    > show steady sequential improvement through the balance of this year and
    > next as WiMAX deployments spread around the world," the analyst says.
    > More wimax news and information can be provided on
    > http://www.knowingabout.com/wimax/, you can also find about wifi and
    > IEEE 802.11, Wimax phones , sprint wimax and connection of Wimax with
    > VoIP market can also play important role in development of WiMax.
    >
    > While Alvarion continues to build its fixed WiMAX presence, it's
    > already developing its next generation of WiMAX equipment to help build
    > out the emerging mobile WiMAX networks like the one Sprint wants. The
    > company, which was one of the first to market with a WiMAX product,
    > should continue to have a technologically leading edge over equipment
    > vendors that are just entering the market.
    >
    > Even so, investors should know that it's not necessarily going to be
    > a smooth ride. Competition is going to get much stiffer as the testing
    > and certification of mobile WiMAX equipment begins next month. "You
    > can expect to see some of the major equipment vendors like Nokia (NOK)
    > and Motorola jumping into the market once the mobile WiMAX standard has
    > been settled," says Peter Bell, a senior analyst at telecom research
    > firm TeleGeography Research in Washington, D.C., who tracks WiMAX
    > deployments across the globe. Sky Light's Carlson believes the first
    > mobile WiMAX product certification will come early next year.
    >
    > Being in the middle of such an emerging hotspot is why I wouldn't be
    > surprised if Alvarion entertains a takeover offer or two from one of
    > the large equipment vendors like Nokia or Nortel Networks (NT) that
    > want to get in on WiMAX quickly. Over the course of the last 12 months,
    > Alvarion's shares have traded in a rather wide range of $4.92 to
    > $10.96. The stock changes hands at around $7 now. Alvarion could prove
    > to be a worthwhile leap of faith for investors or an acquisitive
    > equipment maker.
    >
    > For Further Information and news : http://www.knowingabout.com/wimax/
    >
    >
     
    =?Utf-8?B?dGhlIGNvdW50?=, Jan 1, 2007
    #2
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