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WiMAX Service Lacking in Affordable Devices, Report Concludes
Posted: 01-Dec-2009 [Source: PIke & Fischer]

[Research group cites Clearwire's decision not to subsidize WiMAX devices as potentially hampering growing its user base.]

Silver Spring, MD -- The company pioneering the next generation in wireless broadband communications could face trouble growing its user base because it lacks compelling handheld devices at competitive prices, market research provider Pike & Fischer projects.

Unlike Verizon Wireless, AT&T, and other wireless carriers, Clearwire Corp. has decided not to subsidize the cost of the devices that can access its network, which operates on the technology known as WiMAX. This means users will not get major discounts on their devices when they sign up for a two-year service contract. WiMAX-capable equipment can cost anywhere from $450 to $1,000, and lacks some of the capabilities of today's smartphones, P&F points out in a new report.

"Clearly, it will be very difficult to drive mass adoption at that price level," says Tim McElgunn, chief analyst for Pike & Fischer's Broadband Advisory Services. "Consumers are accustomed to getting their mobile devices subsidized by the carriers, and may balk at the need to pay full price for a device with relatively limited functionality.

"Clearwire and its partners face the dual challenge of designing and manufacturing an attractive and usable handheld and quickly driving down the cost," McElgunn adds.

Despite these challenges, P&F projects that Clearwire's ability to obtain additional investment and the worldwide growth of WiMAX both bode well for the company. The company stands to grow its WiMAX customer base in the U.S. to approximately 600,000 by the end of 2010 and to generate revenues of up to $580 billion, according to the report.


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