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WiMax Service Will Need Affordable Handhelds Fast

Pike & Fischer comments on Clearwire's strategy of not subsidizing devices

Without good, affordable handheld devices, WiMax service faces some notable challenges.

That’s the gist of a report from research company Pike & Fischer, which states: “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.”

Clearwire Corp. is not subsidizing the cost of devices that can access its nascent network, something other wireless companies have done, Pike & Fischer notes, citing Verizon Wireless and AT&T as examples.

“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.”

Users, P&F believes, are accustomed to getting their mobile gizmos subsidized by carriers “and may balk at the need to pay full price for a device with relatively limited functionality.” It believes mass adoption under these circumstances is a difficult proposition and that Clearwire and its partners need to design and make a usable handheld and drive the cost down fast.

However, the researchers also predict that the company’s ability to attract investment and the worldwide growth of WiMax “both bode well for the company,” which stands to grow its WiMax customer base in the U.S. to approximately 600,000 by the end of next year.