Abstract

Following Intel's aggressive promotion of WiMAX and as equipment vendors, standard organizations, and service providers have been brought together, the WiMAX industry has gradually taken shape. However, a mature market already exists for 3G and DSL (Digital Subscriber Line) technology in mobile communications services and fixed data service networks. WiMAX will need to differentiate itself from these to expand its market. Emerging markets have become another market with development potential for WiMAX. However, voice application-orientation, relatively small market size at present, and price sensitivity are issues that equipment suppliers will need to overcome in these markets.

In China, which also counts as an emerging market, the wireless broadband market is experiencing a broadening of applications towards data and multimedia applications. Also, the Chinese domestic market has huge potential, and it is actively adopting new technologies. Meanwhile, the Chinese government is aggressively supporting the TD-SCDMA (Time Division Synchronous Code Division Multiple Access) standard. As of mid-2006, due to issues such as the progress of system testing, 3G licenses have not yet been issued by the government. Under these circumstances, the government's attitude toward WiMAX has been conservative. As of mid-2006, no decision had been made on the opening of frequency bands for WiMAX.

In the past, the development model for Chinese equipment companies was primarily to tap the domestic market first, and after building up product features and price competitiveness, to move into overseas markets. Although WiMAX still has ways to go in the Chinese domestic market, equipment makers have been very aggressive in product development, and have actively participated in standard formulation, joined the WiMAX Forum and cooperated with Intel and other chipmakers.

For Huawei, in addition to its R&D strength, another advantage of the company is its ability to provide complete solutions to service providers. However, at present, the company's focus is on the 3G segment, where it already has seen some results. In WiMAX development, Huawei has been somewhat slower than ZTE. For ZTE, WiMAX is a strategic product. ZTE hopes to raise its position in the wireless field by participating in development of core WiMAX technology standards. In addition to its in-house R&D, ZTE is actively cooperating with international chipmakers, and the company already has received orders for its pre-WiMAX products.

In general, in the 2G and 3G segments, Huawei and ZTE lag behind the international companies because they were late entrants. Regarding WiMAX, the companies have the ability to provide high-speed fixed-line transmission, low-speed portable communications and high-speed mobile communications. Moreover, as the WiMAX industry is still in the development stage, latecomers have an opportunity to exert control over standards. For this reason, Huawei and ZTE have aggressively entered the WiMAX field, and aim to strengthen their competitive position in mobile communications and FMC (Fixed Mobile Convergence).