WiMax suffers massive setback, Sprint and Clearwire break up - Orbitcast

WiMax suffers massive setback, Sprint and Clearwire break up

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WiMaxSprint and Clearwire have "mutually agreed" that they're scrapping the $5-billion project to build out a nationwide broadband WiMax network.

Sprint and Clearwire had signed a letter of intent back in July, but weren't able to "resolve complexities" according the press release.

But regardless of what the press release says, as soon as Sprint Nextel CEO Gary Forsee stepped down as chairman and CEO, the partnership was doomed for failure. Forsee had been one of the champions of the WiMax initiative, and his departure had been called upon by many investors who were upset over the company's poor performance. Wall Street felt that Sprint needs to get back to basics of being a wireless company, especially since the company continues to struggle two years after the $36 billion Nextel merger.

WiMax, in essence, is an unproven technology and the risk was too high.

The breakup between Sprint and Clearwire has many people doubting the future of the technology, and questioning the viability of any type of closed-spectrum rollout:

"Closed spectrum will never give you the growth of open spectrum. Auctioned spectrum gives companies a monopoly for use of that spectrum, hence a high rent is needed, and this eventually frustrates most attempts to put the spectrum to use."

An interesting thought.

Sprint still insists they intend to "provide services" under the Xohm brand but is reviewing its WiMAX business plans. Xohm would still be supported by the "ecosystem" of device, chip and other partners (including Intel, Motorola, Nokia and Samsung), but it's unclear as to what extent.

[Wall Street Journal, Press Release]

180 Comments

I'm not sure WiMax is dead yet. Intel is already rolling out chips that are WiMax ready, and along with Motorola, have invested many millions of dollars in Clearwire. Two things may happen here: another partner, say Google, may want to come into the game, in tandem with the rollout of Android, or Sprint may kiss and make up.

Sprint has nothing to offer in the way of differentiating itself. It is bleeding customers, and if it wants to stop that bleeding, they will have to do something different or better than the two gorillas in the business- Verizon and AT&T

>>>> WiMax, in essence, is an unproven technology and the risk was too high.

Fascinating. We have had Muscle here for months telling us how WiMax was such a big competitive threat to Satellite Radio. I notice he hasn't commented on this.

The reality is that Wimax was not ready for prime time and poses not the slightest threat to Xm or Sirius. Those 1,000,000 Internet Radio stations are going to have a tough time getting into cars.

Now, I wonder if he'll admit that Internet via cellular isn't what he's claimed it to be?

Wall Street felt that Sprint needs to get back to basics of being a wireless company, especially since the company continues to struggle two years after the $36 billion Nextel merger.
--------------------
The Sprint / Nextel networks have gone to " hell in a handbasket " . Their coverage is horrible .

Stackpointer: "The reality is that Wimax was not ready for prime time and poses not the slightest threat to Xm or Sirius. Those 1,000,000 Internet Radio stations are going to have a tough time getting into cars."

While I agree with you in principle, the truth is WiMax will be a viable contender in about 3-5 years.

That being said, internet radio may have its own trouble staying alive once the royalties come into play. I'm willing to gamble that about 85% of the current internet stations will not be able to afford the payments and will cease to exist. The other 15% will either be bought by large companies, or sold to the highest bidder.

>>>> While I agree with you in principle, the truth is WiMax will be a viable contender in about 3-5 years.

One day it could be. Whether a 3-5 year horizon is appropriate, I don't know -- there are still innumerable technical hurdles to be overcome, as this story clearly shows. Those technical hurdles may be overcome given the passage of time, but it is unclear just what the business model is that would support spending billions on the infrastructure buildout.

Clearly, though, this is one form of "competition" that the more excitable merger fans have overstated.

Businessweek excerpt -

According to sources familiar with Sprint's plans, executives at the Reston (Va.) carrier are holding out for a better WiMAX deal early next year that will please investors and customers alike. It had committed to spending $5 billion on the creation of a WiMAX network. As the holder of the largest block of unused wireless spectrum in the U.S., Sprint Nextel is entertaining the possibility of teaming with a winner in an auction of wireless airwaves to be held by the government in January, sources say.

One potentially attractive partner for Sprint—or Clearwire—is Google (GOOG). The Web search leader already has struck a deal with Sprint to offer services on the carrier's WiMAX network. On Nov. 5, Google announced plans for a mobile-phone operating system and the creation of an alliance of companies (BusinessWeek.com, 11/6/07) that will help create tools and features for use in that system. The Open Handset Alliance includes many of the principal WiMAX backers, including Intel, Samsung, and Motorola (MOT).

Google also has expressed interest in bidding on the spectrum auction, though most analysts expect it to team up with an established player to build and run a wireless network.

http://www.businessweek.com/technology/content/nov2007/tc2007119_944064_page_2.htm

Muscle

You conveniently left out the most important point in the article - -that Wimax was being SHELVED by Sprint.

Sure, someone's going to make it happen someday. But this is YEARS away from a substantive deployment, which I believe I've been trying to tell you for months with posts here.

As I've indicated, you seem very excitable about these things, without taking into account the difficulties in deployment. Just as you're convinced there are going to be dual-capable OEM receivers a year from now. Not happening. Eventually? Maybe, but it takes much more time to roll out a significant technological innovation to a nationwide market.

Stack - Not only are dual receivers already created ( Mel has stated several times in articles he has one in his office), my opinion is Sirius and XM will be required to make them available as part of the merger.

Satradiofan - Take a look at these numbers and see whats truly going on with internet radio -

http://www.arbitron.com/onlineradio/aug_ratings_2007.htm

>>> Stack - Not only are dual receivers already created ( Mel has stated several times in articles he has one in his office), my opinion is Sirius and XM will be required to make them available as part of the merger.

XM and SIRI were required as a condition of their license to develop a prototype, which they have done. That's a far cry from bringing them to market.

You may be right, however, that FCC will insist on it as a concession -- and that requirement would be there for one reason only -- because the FCC knows damned well it won't happen without a mandate.

Without a mandate, it is as likely as not to be rejected, at least in the foreseeable future.

Stack, Sprint will do limited roll outs of WiMax in select cities according the reports I've read. While not a national build-out, they will still be using the spectrum on a limited basis.

The mention of Google is interesting- two weeks ago, the NY Times mentioned a conversation that Craig McCaw had with one of the developers of the upcoming "GPhone" platform.

As far as the comments regarding a dual mode radio, given how cheap these components can be made these days, why even doubt it? These things don't cost jacksh*t to produce.

Max- Exactly, on the point about the dual mode radios. I can't imagine why Stack and others think the idea of the dual mode radio being produced quickly is so ridiculous. I imagine they would quickly come to the market with one or two offerings to capture the markket for such. Why not? Thats what they do. Technologically its very simple.

>>> Max- Exactly, on the point about the dual mode radios. I can't imagine why Stack and others think the idea of the dual mode radio being produced quickly is so ridiculous. I imagine they would quickly come to the market with one or two offerings to capture the markket for such. Why not? Thats what they do.

It can be done within a year, I'm sure. I just don't think there is any motivation to do it -- unless as MUSCLE suggested, FCC requires it. If they do, you could see them at retail in a year. Any significant OEM presence will be 3 years or more.

>>> Technologically its very simple.

Nonsense. These devices would be, by an order of magnitude, the most complex component in an automobile. XM and SIRI have been able to create an interoperable prototype; but turning that into a production item will involve significant unit costs.

>>> Sprint will do limited roll outs of WiMax in select cities according the reports I've read.

We'll see. One day, certainly -- but there is no business model there for it yet -- and a "limited rollout" is apt to make whatever business model they DO come up with more problematic.

For several years now, I've listened to techno-neophytes claiming that Wimax is just around the corner. In reality there are still substantial technical problems with any wide-scale implementation. Not the least of which, is how the hell do you make money on it? Is there even sufficient demand to warrant the massive expenditures that are required? I have mobile Internet now and find it difficult to even justify the cost of it; everywhere I use it it seems like I would have had wireless anyway.

I can't wait to get my hands on a dual receiver. I really believe those dual radios and A La Carte radios will spur retail sales a lot this time next year. Really looking forward to it. Of course the merger has to come first though. Lets Hope!

Stack: "Nonsense. These devices would be, by an order of magnitude, the most complex component in an automobile. XM and SIRI have been able to create an interoperable prototype; but turning that into a production item will involve significant unit costs."

Stack, I would assume things like traction control and fuel delivery systems are more complex than a radio. Above this item, there are individual service radios being sold for 20 bucks.

Work with us here, will ya???

>>> Stack, I would assume things like traction control and fuel delivery systems are more complex than a radio.

I think you would be assuming wrong.

Uh, Stack, a satellite radio receiver is not "more complex"- and certainly far less costly - than dozens of electric components and controls on a modern car. I don't know how you can make such a statement.

>>> Uh, Stack, a satellite radio receiver is not "more complex"- and certainly far less costly - than dozens of electric components and controls on a modern car. I don't know how you can make such a statement.

Have you any idea what all is going on within a satellite radio? The only component I could think of that might come close would be a navigation system, but really, it is fundamentally simpler than satellite radio in that it lacks a lot of the functions required in satellite radio (such as dealing with repeaters, automatically shifting to the strongest of three disparate signal sources, implementing space/time diversity, decryption and decoding of the received signal, breaking it out into 170 channels, etc.) There is a lot of stuff going on there. I'm no expert on embedded software, but the special-purpose computers within a car are just not on this level at all.

None of those dozens of "electric components and controls" are anywhere nearly as complex as the satellite radio. Cost, well, you have to pay through the nose to car manufacturers for anything. That has nothing to do with it -- a piston may cost more than most electronic components but it certainly isn't as complex.

I've had this argument with someone before who totally didn't get it, either. Just because it is in a small box, it is cheap, it works reliably and you cannot see what it is doing, THAT doesn't make it any less complex a device. Because the manufacturers have insulated you from seeing the complexity of the system, you assume it very simple.

Have you any idea what all is going on within a satellite radio? The only component I could think of that might come close would be a navigation system, but really, it is fundamentally simpler than satellite radio in that it lacks a lot of the functions required in satellite radio (such as dealing with repeaters, automatically shifting to the strongest of three disparate signal sources, implementing space/time diversity, decryption and decoding of the received signal, breaking it out into 170 channels, etc.) There is a lot of stuff going on there. I'm no expert on embedded software, but the special-purpose computers within a car are just not on this level at all

I've had this argument with someone before who totally didn't get it, either. Just because it is in a small box, it is cheap, it works reliably and you cannot see what it is doing, THAT doesn't make it any less complex a device. Because the manufacturers have insulated you from seeing the complexity of the system, you assume it very simple.>>

Yes I do, or at least "simpler." It is preposterous to make a statement that a $20.00 radio is more "complex" than a system costing at least $1000 that can monitor the traction of four wheels, make decisions 1000 times a second to control them independently, work in sub zero or 300 degree conditions, and work reliably for at least a decade. And it is certainly "simpler" than modern fuel systems that have to compute dozens of factors in nanoseconds under all kinds of conditions to keep tailpipe emissions under 15 parts per million for certain particulates 100% of the time. Screw the radio. It's a frikkin' toy.

Dude, take a Xanax, or at least pour yourself a black and tan. You're so obsessed with satellite, you have ceased to think clearly. Let them bolt two freakin' radios together for $40 and that will end the "complexity" of the dual service receiver. Jeez Louise!

>>> Dude, take a Xanax

Sounds to me like you already have had a few bars.

Right- along with your brilliant riposte, comes the news they're giving away radios for FREE.

These things are getting more complex all the time!

>>>> Right- along with your brilliant riposte, comes the news they're giving away radios for FREE.

>>>> These things are getting more complex all the time!

Handheld calculators have been under $10 for years. Do you think they aren't complex?

I will say this much -- lots of times, things seem amazingly simple to those who haven't the slightest idea what goes into them.

Stack: "Handheld calculators have been under $10 for years. Do you think they aren't complex?

I will say this much -- lots of times, things seem amazingly simple to those who haven't the slightest idea what goes into them. >>

Having spent the first 25 years of my working life in a manufacturing environment, the answer to your question is "no."

That doesn't mean that a John Deere tractor is more "complex" than a calculator, but it sure takes a hell of a lot more in resources and cost to produce one. Forget the "complexity." It's not even an issue. They can bang this electronic crap out for peanuts, and still make a margin on it.

There is no inherent technical difficulty (or at least one you can name) that makes a dual service receiver such an insurmountable achievement. It's a freakin' chip, and while they may be "complex" as you put it, they make more in hour than John Deere builds tractors in a month.

You're just totally obstinate beyond all reason when it comes to this subject.


>>>>>>There is no inherent technical difficulty (or at least one you can name) that makes a dual service receiver such an insurmountable achievement. It's a freakin' chip, and while they may be "complex" as you put it, they make more in hour than John Deere builds tractors in a month.

Sure there is "inherent difficulty". Nothing good engineers couldn't resolve, but to suggest that the complexity of a tractor is on par with the complexity of one of these designs is absurd.

It's a "freaking chip"? Tell that to Intel. Remember the Pentium floating point division problem? I do.

Can I name inherent difficulties? I have no knowledge the internal workings of these devices, but I know enough to know I don't know much about it. I'm certain there would be difficulties in dealing with disparate authentication processes for receivers, decryption of the material, dealing with SIRI's stat-muxing versus XM's fixed bandwidth allocations, power consumption and any number of other different areas.

A John Deere-sized block of gold would be more expensive than a receiver, too - but hardly would it be as complex. The size or cost of it has nothing to do with it.

I think it is a testament to just how good these engineers are that people like you think the end product is "simple". Yes, they're stamping out silicon, but it isn't sand off the Florida beaches.

"I think it is a testament to just how good these engineers are that people like you think the end product is "simple". Yes, they're stamping out silicon, but it isn't sand off the Florida beaches."


"A man convinced against his will, is of the same opinion, still."

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