Column
Opportunities and Challenges for Taiwanese WiMAX Equipment Manufacturers in 2010
Mobile Taiwan Applications Promotion Program Office, Industrial Development Bureau, MOEA

  1. Foreword

According to statistics of the WiMAX Forum, there were a total 523 WiMAX networks in 147 countries around the world by the end of 2009. In 2009, 115 new networks were added, representing a growth rate of 28.2% and highlighting the aggressive network deployment of global WiMAX carriers in 2009. Africa had the highest number of networks, accounting for 21.4% of the total. The Asia-Pacific region led the world in terms of network coverage, with 205 million people covered by WiMAX networks.

According to statistics of MIC (Market Intelligence & Consulting Institute), the number of worldwide WiMAX users reached approximately six million at the end of 2009. The WiMAX Forum has set a target of 130 million worldwide users by 2013; if this target is to be achieved, annual growth will have to reach 100% to 120%. Therefore, it is expected that the number of worldwide WiMAX users could reach 12 to 13 million in 2010.

Worldwide WiMAX CPE shipment volume (including: indoor CPE, outdoor CPE, USB dongle, WiMAX module) reached 5.02 million units in 2009, and shipment value reached US$437.3 million. Taiwanese manufacturers accounted for 55% of worldwide WiMAX CPE shipment volume, highlighting Taiwan's importance in the global WiMAX industry.

2. Taiwanese WiMAX Equipment Manufacturers' Shipment in 2009

With the help of relevant government policies, Taiwan has already established a mature WiMAX ecosystem, including component suppliers such as chipmakers, base station equipment manufacturers, testing companies, system integrators, and CPE manufacturers. Taiwan has become the most competitive WiMAX nation in the world.

Figure 1: Taiwanese WiMAX Industry Ecosystem

T1

Source: M-Taiwan project, Industrial Development Bureau, Ministry of Economic Affairs, compiled by MIC, January 2010

After the global economy started to recover, Taiwanese WiMAX CPE shipment started to increase significantly in the second half of 2009. Full-year shipment volume of Taiwanese manufacturers exceeded 2.7 million units in 2009, representing 201.6% annual growth. Taiwanese manufacturers' shipment value reached US$240.5 million.

Figure 2: Taiwanese WiMAX CPE Shipment Volume, 3Q 2006 - 3Q 2010

Y2

Source: M-Taiwan project, Industrial Development Bureau, Ministry of Economic Affairs, compiled by MIC, January 2010

3. Key Issues for Taiwanese WiMAX Equipment Manufacturers in 2010

  • a) 802.16m (WiMAX 2) Standard Expected to Be Finalized in Mid-2010

In October 2009, Samsung cooperated with Russian carriers for the first investment in 802.16m standard testing. Samsung has been the most aggressive company in this area. The US carrier Clearwire has stated that it will test 802.16m-related equipment in 2011, and that it will only begin large-scale commercial deployment in 2012. The IEEE stated in January 2010 that the 802.16m standard (also known as WiMAX 2.0) is expected to be officially finalized in mid-2010. Taiwanese WiMAX manufacturers will be aggressive in terms of 802.16m development in order to take advantage of 4G market opportunities.

  • b) CPE Products Expected to Be Sold through Retail Channels in 2010

In order to accelerate WiMAX penetration, the WiMAX Forum has started to draft relevant standards, in order to enable CPE used by carriers to be sold through retail channels after passing WFDCL certification. In this way, Taiwanese equipment manufacturers will not have to go through branded vendors or system integrators in the future, and will be able to directly ship their products to retail channels. Developments in this are will be closely watched in 2010.

  • c) WiMAX Equipment Manufacturers to Cooperate Closely with Partners

Currently, many large-sized carriers/system integrators are aggressively duplicating existing networks to other regions, thereby shortening the learning curve in order to quickly provide commercialization services. Starting in 2010, bundled WiMAX CPE sales through carriers and system integrators will be a focus area of Taiwanese manufacturers.

  • d) Chinese and Korean Manufacturers to Make Aggressive Push in WiMAX CPE Market

Samsung outsources relatively few products to Taiwanese manufacturers. Huawei and ZTE have their own factories manufacturing WiMAX CPE; currently, only orders featuring high technology levels or small-volume orders that do not generate significant production efficiency are outsourced to Taiwanese manufacturers. Taiwanese manufacturers' ability to increase their market share in the future will depend on whether there will be changes in the cooperation strategies of different companies.

  • e) Taiwanese Manufacturers to Aggressively Enter the Base Station Market to Generate New Growth Momentum

Currently, Taiwan does not yet have its own R&D capabilities for macro/micro base stations. The country only has R&D capabilities for pico base station R&D. With the support of the M-Taiwan project, Taiwanese companies have already achieved a high level of pico base station R&D. It is expected that the cooperation between Taiwanese pico base station companies and domestic Taiwanese carriers will deepen in 2010. Furthermore, after accumulating significant experience in IOT, companies will be able to sell base station equipment to small-sized overseas carriers.

4. Key Development Areas for Taiwanese WiMAX Equipment Manufacturers in 2010

Regarding emerging markets, India is currently a closely watched market. The Indian government has announced that it will start spectrum auctions at the end of February. Besides the well-known domestic carriers BSNL and MTNL, which have already obtained spectrum, Tata is also gradually releasing orders for WiMAX equipment, and Taiwanese manufacturers have already obtained some of these orders. In 2010, India is expected to launch WiMAX services. The industry will closely monitor whether user growth meets expectations. Other regions, such as other South Asian countries, Brazil, Indonesia, and Eastern Europe, will also be key shipment destinations for Taiwanese manufacturers. An important factor for the future shipments of Taiwanese manufacturers will be whether they will be able to expand cooperation with carriers and system integrators in these regions.

New application services are expected to be launched in mature markets, stimulating demand for equipment such as WiMAX mobile phones, PNDs, and e-books. For example, currently there are indications that the Taiwanese Smartphone vendor HTC will supply a Smartphone, codenamed A9292, to Sprint. Shipment levels of this model are expected to greatly exceed the shipments of a model the company supplied to Yota in 2009. The growth potential for WiMAX equipment in mature markets is thus very significant.

Other key WiMAX application services include smart grid, surveillance, location-based service, VoIP etc. These services take advantage of the large spectrum of WiMAX technology and its mobile features. These will be key areas in the WiMAX market in 2010.

 

 

Media Sponsor