Vendors cite mixed forecasts on Wimax spending

13 Aug 2008

Wimax vendors have shown mixed results on end-user spending, according to a recent report compiled by FierceBroadbandWireless.

NextWave Wireless, which, in addition to its many businesses, is developing Wimax chips, revealed recently that it is running out of cash. The company reported a loss of $65.7 million for the second quarter.

Allen Salmasi, NextWave's chairman and CEO, said the company is feeling the effects of a slowing global economy on its business.

"This has resulted in lower than anticipated sales of our 3GPP and WiFi-based network products and a delay in Wimax network deployments that will continue to impact projected sales of our Wimax semiconductor products,' Salmasi said in a statement.

Redline also indicated a delay in Wimax spending was coming during its preliminary second-quarter results announcement last month.

The Canadian Wimax vendor adjusted its revenue outlook, cutting $6 million off forecasts for the second quarter. The vendor now expects revenue to come in around $9 million for the three months ended June 30.

Redline attributed the shortfall to several reasons, including 'a softening in the overall demand for Wimax products based on the current 802.16d standards as operators consider whether or not to wait for the next generation of Mobile Wimax technologies'.

Redline's CEO and President Majed Sifri added: 'Some prospective and existing customers have delayed their rollouts and purchasing decisions as they review the option of adopting a next generation mobile Wimax solution.

But, according to him, market opportunities remain strong due to the demand for broadband access, "but the timing of customer decisions has become more difficult to predict.'

Meanwhile, Alvarion reported record revenues and Wimax shipments in the second quarter. The company said revenue came in at $69.7 million, a 21 percent increase from $57.6 million the previous year. Wimax revenues in the second quarter were more than $38 million, or about 55 percent of total revenues.

'Current customers are expanding their networks, bookings are strong, and the pipeline of potential new business is large and growing,' said CEO and president Tzvika Friedman.

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