WiMAX: The Next Big Disruption

New and disruptive technologies are always attacked as they break into new markets, but usually, there's a strong set of upstart companies and individuals countering the criticism and championing a new innovation for its technical merits. That's why it's a little odd to see a relative dearth of supporters crowing about how a broadband wireless technology called WiMAX beats everything else out there.

Sure, the technology has its fans. But like its more localized predecessor Wi-Fi, WiMAX is not as much about technical innovation as it is a platform innovation. Where wireless technologies of the past quibbled over technical terms only engineers understood, WiMAX wants to change the balance of power in the wireless industry, by making broadband cheaper and more flexible for consumers.

The wireless revolution
WiMAX encompasses a set of wireless standards that can deliver data broadband speeds in a fixed, nomadic, or mobile application. It was developed in its fixed implementation; Intel (Nasdaq: INTC  ) unwired the Sundance Film Festival in Utah in 2005, when it delivered movies 12 miles over the air to the Park City ski lodge through early WiMAX protocols. Today, companies are beginning to implement nomadic and mobile versions of WiMAX as well.

The fully mobile version of WiMAX operates much like other mobile broadband offerings today -- you simply stick a modem card in your laptop or PDA and enjoy high-speed connectivity sans wires. That's pretty much it -- no fancy additional features or capabilities that aren't already included in broadband wireless offerings from AT&T (NYSE: T  ) or Verizon Wireless -- a joint venture between Verizon Communications (NYSE: VZ  ) and Vodafone.

The point is that you get the same thing from your typical wireless carrier, minus the typical wireless carrier. Now that's disruptive.

In the same way that you can pay a small fee for a Wi-Fi card at Best Buy or Circuit City today, plug it in, and scout out some free hot spots for quick browsing, WiMAX proponents hope to offer consumers an even lower-cost solution over a wider area with WiMAX.

The business revolution
In its early days, every "alternative" communications company out there was pushing WiMAX standards as a means of helping level the playing field against the major wireless carriers. But you only have to look at who's backing WiMAX technology today to see that more is going on here. In addition to computing giant Intel, wireless-service entrant Clearwire (Nasdaq: CLWR  ) , search king Google (Nasdaq: GOOG  ) , and more than 500 other companies are members of the WiMAX Forum, an industry group supporting the technology.

Large technology corporations across a number of industries, as well as smaller companies, see WiMAX as a way of bringing more wireless products and services to consumers without necessarily having to work through a few dominant carriers. And for any individual, small business, or organization in need of a broadband solution, WiMAX gives the option of setting up private or localized networks with off-the-shelf equipment, much like Wi-Fi offers today.

Where to from here?
WiMAX deployments around the world number in the hundreds today, but the technology still hasn't hit the mainstream as a mobile broadband alternative. Clearwire and Sprint Nextel (NYSE: S  ) are still trying to piece together a partnership strategy that will help get a nationwide network deployed more quickly with less capital. But Israeli company Alvarion (Nasdaq: ALVR  ) has seen healthy demand for its WiMAX solutions. Motley Fool Hidden Gems pick Ceragon Networks is also seeing strong business from providing backhaul solutions that dovetail with bandwidth demands from WiMAX networks.

So as the WiMAX platform moves ahead, reaching mainstream users in the next few years, consumers can expect to see a few new corporations vying to become their new wireless company. It's refreshing to see innovation take a more consumer-friendly tone for a change, rather than the usual barrage of obscure technospeak that seems far removed from our everyday lives.

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Alvarion and Google are both Motley Fool Rule Breakers selections. Sprint Nextel and Intel are Inside Value picks. Ceragon Networks is a Motley Fool Hidden Gems pick. Best Buy is both an Inside Value and Stock Advisor selection. The fool owns shares in Best Buy. Try these market-beating publications free for 30 days.

Prashant Rathore updated this article, originally written by Dave Mock and published on Feb. 20, 2008. Prashant has no financial interest in the companies mentioned above. The Fool has a disclosure policy.


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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 29, 2008, at 4:56 PM, mileageguru wrote:

    Looks like WiMAX technology is getting a lot of traction this days. TelegeoGraphy just came up with a report showing a great growth for WiMAX all over the world, especially in India.

    --- www.WiMAXED.com

  • Report this Comment On October 30, 2008, at 2:04 AM, deadlocked wrote:

    Is it WiMAXing in general that will be the big hit or mobile WiMAXing?

    This post is understandably not real specific, but it does seem to indicate that the disruptive characteristic of WiMAX is based in its ability to pull a reach around (yipes!) on the big mobile carriers.

    So, WiMAX, mobile WiMAX, or both??

    And is it all about the service alone, or will there be an onslaught of new mobile WiMAX gear as well?

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