Friday, 3 April 2009
WiMAX = Betamax
Putting the cat among the pigeons yesterday was Nokia EVP Anssi Vanjoki who equated WiMAX with Betamax, the failed home video standard. The analogy is actually a reasonable one. The dominance of VHS was due to commercial forces, rather than technical superiority. This happens time and again in technology markets: it is commercial imperatives that determine choice of technology, not the technology itself. Think Blu-Ray vs HD-DVD or even GSM vs CDMA. The examples are numerous. Likewise with WiMAX vs LTE. Any operator that already has a 3G, or even GSM, network installed will find it cheaper to deploy LTE (although still very expensive). Any company thinking of deploying a greenfield WiMAX solution into an established market will face tremendous competitive pressure from the LTE operators. WiMAX has a potential home in markets with inferior 3G coverage but LTE will benefit from the scale offered by the migration of GSM and CDMA operators over the next 5 years.