WiMAX Forecast for 2009: Cloudy

"Clearwire is unquestionably attempting to pull off a truly massive undertaking,” Kainer wrote, “building a national mobile network without fully committed funding in competition with at least two potent competitors using a radical new technology — as a publicly-held company subject to quarterly scrutiny."

What’s more, there’s no guarantee that WiMAX will succeed in becoming the de facto standard for wireless broadband. Most global carriers except for Sprint, including AT&T (T) and Verizon Wireless (VZ), are backing LTE as the technology of choice. Verizon CTO Dick Lynch has said recently that he expects LTE to go live in the U.S. before the end of 2009 — far earlier than most industry predictions to date.

Still Bullish

And Wolff himself has indicated that Clearwire may not be wedded to WiMAX, saying in a conference call in December that the company’s network infrastructure would allow it to shift to LTE down the road. (He has since backed off that assertion, telling InformationWeek that "we're going full speed ahead with WiMAX.")

Clearwire also faces legal challenges. Last month, base station vendor Adaptix filed suit in U.S. District Court in the Eastern District of Texas, charging that Sprint and Clearwire are infringing upon six patents related to WiMax technology covered by Adaptix patents. An injunction in the case could permanently cripple Clearwire’s business plans.

Still, CEO Wolff remains bullish. And the hardware vendors are jumping onboard, with several PC makers including Dell (DELL), Hewlett-Packard (HPQ), and Toshiba (TOSH.SW) planning to introduce WiMAX-enabled laptops in the next 12 months. At the Consumer Electronics Show this week in Las Vegas, several vendors are showing off new WiMAX-equipped devices, including a home networking device from Motorola Inc. (MOT) that combines a WiMAX modem with a WiFi hotspot.

Ultimately the WiMAX-LTE battle may not be an either-or proposition, with both technologies offering different capabilities for different customer sets (and coming from different carriers). WiMAX could be particularly suited to so-called “nomadic” users, who need a totally reliable, high-speed connection within a limited geographical range for use in coffee shops, conference rooms and the like, rather than a truly nationwide, fully mobile service. The prospects for Clearwire may come down not to a standards battle but to dollars and cents: Can the company generate enough revenue, and raise enough capital, to build out its network and survive until around 2014 — which is when ThinkEquity analyst Kainer estimates it will break even?

The Portland service, sold under the brand name “Clear,” offers a range of price levels — from a $20-per-month “fixed” service to $80 a month for mobile service on two devices. The VoIP add-on will cost another $25 a month for unlimited calls in the U.S. and Canada.