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Switched On: The WiMAX Window (Part 2)

Ross Rubin , @rossrubin

Each week Ross Rubin contributes Switched On, a column about technology, multimedia, and digital entertainment:

Last week's Switched On discussed some of the promise of WiMAX as delivered through Sprint's Xohm service. There are at least three larger open questions about the prospects for WiMAX, particularly as an embedded technology. First, we now know more about how the service will be offered, but we don't know at what prices it will be offered, at least for the blanket subscription. Web surfing on an EV-DO connection may not quite rival a home broadband experience, but it's often more than adequate for most Web tasks. WiMAX will certainly have to be priced significantly below the $60 per month that today's operators charge as an add-on to a wireless subscription or whatever they may lower prices to by 2008 and 2009.

Second, while the idea of not charging a subscription for embedded access is a step toward ubiquitous wireless access for devices, it is far from a guarantee of adoption, particularly in a competitive consumer electronics category. Embedding such products exacts a premium both at the cash register and in terms of battery life. Both the PSP and Nintendo DS include WiFi, but digital camera manufacturers have struggled with it outside of the professional market and it isn't in any mainstream camcorder.

While the Zune and especially the Sansa Connect have some interesting features built on WiFi (as should the Slacker portable player due later this year), neither has come close to rivaling the iPod, which (at least up until this point) has lacked an FM radio, much less a a data radio. However, there's a strong argument that WiFi's limited coverage makes it far less useful than WiMAX (imagine if you could only use your cell phone at home or at a coffee shop).

Last week's column discussed some of the niche devices that are slated to appear early in the Xohm rollout. However, while there are certainly strong pockets of growth among digital cameras and MP3 players, their overall growth is slowing in the U.S. (and camcorder units are declining) as average prices drop, making it more difficult to cram in new features such as WiFi and WiMAX. Saturation is driving this more than cannibalization from the cell phone.

Xohm can help its own cause. If it can breathe new life into existing devices or help spur new popular ones (say, a wireless, portable DVR / video viewer), it will drive demand and differentiation from the cell phone. However, as Sprint embraces retail consumer electronics, it will see that -- on some level -- the enemy is itself, a familiar position for a company that has juggled hosting the wireless networks of Helio, Disney Mobile, its cable joint venture Pivot and its own Boost.

In addition to notebook PCs, another area where WiMAX should have exceptional promise down the road is in the vehicle. Xohm should have an excellent service footprint (or is that tire print?) when it is fully deployed. As Dash Navigation has shown us, GPS units become better and far more useful resources when they can tap into a live, two-way connection, and WiMAX would be well-suited to delivering an Internet radio or even video service to the vehicle. Today's in-vehicle DVD players could evolve into headrest-mounted touch screens providing an entertainment experience like Virgin America's RED while accommodating a generation obsessed with sharing every soporific specific of their lives with the world.

This brings up yet another question: would that music service be branded Xohm? Or will it search for music using its partner Google? Sprint insists, as nearly all telecom companies routinely do, that it will not offer a "dumb pipe" in WiMAX and points vaguely to its partnership with Google as "not an accident." But this is at odds with its goals of having WiMAX as a popular embedded or possibly wholesale technology.

Apple, for example, may have been willing to spare AT&T a token line of digital branding on the iPhone, but would probably be at least as reluctant to advertise Xohm on a WiMAX-embedded iPod. Kodak, which renamed popular photo sharing site Ofoto to be in line with its EasyShare branding, would be challenged to incorporate much Xohm branding in a wireless sharing feature. This is new ground for many consumer electronics companies, but several are already looking seriously at WiMAX.

Finally, while WiMAX is all about speed, Sprint's competitors are saying "Not so fast." Both the CDMA and GSM camps will be turning up the volume on their next generation technologies UMB (Ultra Mobile Broadband) and LTE (Long-Term Evolution) as WiMAX hits its stride in 2009 or 2010. AT&T and Verizon will benefit from the scale of focusing on one kind of wide-area wireless network and one kind of access device that trumps the volumes of any other.

But Xohm will indeed have an opportunity before these other "4G" networks get launched, much less rival its coverage. Sprint must play ringmaster and lion-tamer at once, bringing together disparate industries while keeping competitors at bay. At stake are the rewards that lie at the intersection of mobility and the Internet.

Ross Rubin is director of industry analysis for consumer technology at market research and analysis firm The NPD Group,. His blog can be read at Views expressed in Switched On are his own.

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