All of the recent news about open access may have some interesting competitive implications, and WiMAX may not be a benefactor. The success of open access initiatives is very dependent on the availability of “open” devices. In other words, the proliferation of “open” wireless devices will drive the success or failure of open access. If there are limited devices, there are few opportunities to connect to an open network. Many analysts think Verizon’s new openness centers around meeting the challenge of Google. The prevailing thought is if Google puts its influence and market power behind “openness”, well then Verizon better respond. But there is another way to look at this new found openness. Maybe Verizon’s moves have more to do with pre-empting WiMAX, than worrying about Google.
An early premise of WiMAX has been the openness it will bring. Sprint has been on record for some time about their intention to make the Xohm network open to all appropriate devices. Now Verizon says they will do the same for both their 3G and 4G networks. AT&T even recently got in the action, saying through the USA Today that they are officially open as well. T-Mobile announced long ago, their intention to be a part of the Google led open handset alliance movement. So here’s the rub. If everyone is all of the sudden open, and device availability drives the success of openness, where will the device manufactures put their focus? After all, there’s only so much silicon to go around. As a device manufacturer, I can focus my efforts on the 160 million plus subscriber universe of GSM/CDMA networks (U.S. market only in this example), or the potential of the unproven WiMAX marketplace. I think I’d place my bet with the former. So where does that leave WiMAX, Xohm, and Clearwire? Hard to say. Sprint appears to be shopping Xohm, and Clearwire had big hopes of partnering with Sprint/Xohm, which obviously didn’t happen. It’s certainly too early to declare WiMAX in serious trouble. It still has the backing of powerhouses like Intel, Motorola and Samsung. But time will tell whether WiMAX will be able to generate the device availability necessary to succeed over the long term. If I’m Clearwire or Sprint, I’m a little nervous.
This might make sense, except Intel and others have committed to make tens of millions of WiMAX devices. I don’t think their talk is cheap because they’ve invested hundreds of millions in Clearwire.