Abstract

Overall, the market for WiMAX technology is still at the starting gate. As the industry supply chain remains flexible, now is a time when manufacturers can jockey for position. However, there is an issue regarding whether WiMAX products will develop like network communications products and face a continuous slide in average product prices, with shipment value unable to grow despite growth of shipment volume. Whether WiMAX products in the future will face a continuous slide in ASP depends on such issues as WiMAX equipment suppliers' R&D capabilities, their ability to innovate products and domestic production share of components.

Key Chip Development

A look at the BOM for a WiMAX product will show that key chips account for about 70% of the total price of a product and other components account for about 30%. For this reason, controlling the development of key chips is a must-have capability in the WiMAX industry. However, the key chips and MIMO antenna technology are controlled by large European and North American companies.

WiMAX Industry Development Needs Broad-Based Approach

Korea was quite early with development of WiBro technology. In addition, Korea's broadband penetration is high, and consumers are familiar with the use of digital content. For this reason, no matter whether companies are equipment suppliers or a service provider, their outlook for WiBro development is optimistic. With the investment of resources by KT, SKT and the cooperation of local equipment suppliers, Korea is becoming a leading nation globally for the commercialization of IEEE 802.16e technology. This will enhance Korea's wireless broadband environment. Korea's large WiBro equipment companies have made central office products, which have high technology barriers and require large investments, part of their WiBro market strategy. Through rapid development and control of central office products, the companies' WiBro offerings are rapidly winning acceptance in overseas markets. The companies will maintain their leading global position especially by controlling the compatibility of terminal products through their central office product expertise. Moreover, in 2006, Korea won the right to establish the first WiMAX certification laboratory outside of Spain, which will help shorten certification periods for products and accelerate product development and volume production. An analysis of Korea's WiMAX industry development shows how government, industry and academia have developed policies, services and applications, and equipment to create a complete industry value chain. This has accelerated the creation of new technology, making wireless broadband services and applications more robust, increasing value-chain activities and promoting economic development.

For this reason, developing the WiMAX industry has not simply been a matter of early formulation of frequency regulations in order to expand the domestic market with applications and services. Aggressively participating in certification and establishment of R&D clusters can speed development and certification of WiMAX products. In addition, encouraging companies to join WiMAX Forum activities and promoting early development of inter- and intra-industry relations allows equipment suppliers to free themselves of control by one chip company or branded vendor, and stimulates greater flexibility.

Appendix

List of Companies