Think of it as "broadband on steroids." The primary benefit of the emerging technology known as "WiMax" will be that it untethers everyone from their computers while bringing high-speed Internet access to rural and suburban areas. The industry has been waiting for the deluge for some time now, and the floodgates should open with Intel's (NASDAQ:INTC) release of its WiMax "Rosedale" chip on Monday.
The current standard, known as Wi-Fi, allows computer users to go cordless for up to 300 feet. That limiting factor generated a proliferation of various Wi-Fi "hot spots," like Internet cafes, for mobile users to stop in and access the 'Net while sipping on a cup of joe. WiMax, however, will allow such access to the Internet from a distance of several miles. In rural areas -- think of the vast plains across our nation's "bread basket" states -- that range can possibly extend for as many as 30 miles.
WiMax is short for "Worldwide Interoperability for Microwave Access." It offers the high speeds associated with broadband Internet access, wireless connectivity like Wi-Fi, and broad coverage similar to what cell phone users have. Turn on your mobile PC, and you'll be instantly connected to the Internet at speeds of up to 70 megabits per second. Even after the signal is divided up between various home and corporate users, it will still surpass data transfer rates that cable modem users experience.
Cost remained one of the last hurdles to the proliferation of WiMax. Intel's Rosedale is priced at $45 each per 1,000 chips ordered, an amount that's expected to exponentially speed up their adoption. Another potential problem is compatibility. The Institute of Electrical and Electronics Engineers (IEEE), the group that sets industry standards, wants to ensure that WiMax equipment works together. A forum to address just that was postponed from January to July. But even with the high cost and potential snags of possible incompatibility, investors can start looking into ways of profiting from the coming boom.
A number of gear makers already exist, and they're producing equipment. Telecom equipment maker Alvarion (NASDAQ:ALVR) has signed on Alcatel (NYSE:ALA) and Lucent (NYSE:LU) as resellers of its WiMax equipment and has demonstrated the capability of its equipment using the Intel chip. It is the industry leader, focusing on selling gear to carriers. Airspan (NASDAQ:AIRN), a provider of wireless voice and data systems, has also been in the forefront of WiMax and has worked with Alvarion to ensure that its equipment is compatible.
Other vendors that will use the Intel WiMax chip in their equipment include Siemens (NYSE:SI), tiny Proxim, Redline Communications, ZiMax Technologies, and China's Huawei Technologies.
WiMax also has the potential to upset the apple cart in phone service. A California ISP is testing a WiMax VoIP system, and carriers like AT&T (NYSE:T) are investigating WiMax as way of getting around paying local carriers -- currently a $10 billion expense, the company says -- for last-mile access to customers.
WiMax has been a long time coming, and now that it's here, we will have to wait just a bit more. Still, now might be just the time to build an ark of opportunity as the waters prepare to rush in.
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Fool contributor Rich Duprey does not own any of the stocks mentioned in the article.
