Mon, May 26, 2008 - Page 12 News List

WiMAX demand likely to benefit local firms: IDC

MIXED FORECASTIDC and Macquarie both predicted a rosy future for WiMAX firms, while MIC said uncertainty in North America could limit shipments for this year


Taiwanese telecom equipment manufacturers are expected to benefit from rising demand for WiMAX technology on mobile devices in the Asia-Pacific region, market researcher International Data Corp (IDC) said in its latest report.

WiMAX subscribers may grow to 23.5 million by 2012 in the Asia-Pacific region after commercial trials of high-speed transmission services are completed, an IDC report on Thursday said.

Spending on the WiMAX radio access network may amount to US$2.6 billion by then, the report said.

“WiMAX will be a boon to Taiwanese companies, who have the core WiMAX and 802.11n technologies,” IDC analyst Bill Rojas said in the report.

WiMAX demand would be driven by activity in emerging markets in the Asia-Pacific region such as China, as WiMAX would provide a competitive differentiator to wire line broadband access, Rojas said.

In developed countries, customers’ thirst for mobile TV and streaming services on mobile gadgets would spur demand for wider bandwidth on WiMAX technology, he said.

IDC did not provide a detailed forecast about the growth of local WiMAX equipment makers.

Macquarie last week upgraded local telecom equipment maker Gemtek Technology Co Ltd (正文科技) to “Outperform” from “Underperform,” citing significant improvement in the high-margin WiMAX and IPTV STB businesses.

Macquarie set the target price of Gemtek at NT$80, implying an 11 percent increase over the next 12 months from the stock’s closing price of NT$72.4 on Friday.

“We believe the timing is right now, with Gemtek just seeing sales contributions from these segments ramping up to 20 percent in March and 30 percent in April, on the back of new orders,” Macquarie analyst Lu Chia-lin (呂家霖) said in the report.

Positive data points and industry events also led Macquarie to believe the strength is sustainable, Lu said.

Despite long-term robust outlook, local researcher Market Intelligence Center (MIC, 資訊市場情報中心) issued a short-term warning last week.

Limited demand for customer premises equipment (CPE) from new WiMAX players and high uncertainty in the North American and Middle East operators could cap shipments for local companies this year, MIC said in a report released last week.

Because of slower-than-expected demand, WiMAX CPE shipments from local suppliers fell around 12 percent in the first quarter to 185,200 units, MIC said.

Revenues slipped by 11.3 percent to US$35 million during the same period, MIC said, indicating that the average selling price remained flat.

Taiwanese manufacturers’ CPE shipments are expected to expand by 27 percent quarter-on-quarter to 236,000 units this quarter and rise another 39 percent to 327,000 units next quarter, MIC said.

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