Nokia Deals WiMAX Another Blow

Talk about “ouch.” Consumer WiMAX continued its descent into underdog status this week thanks to Nokia Corp., which announced that it’s stopping production of its WiMAX Internet tablet.

The world’s No. 1 handset-maker said it has no plans to replace the N810 WiMAX MID — which is Nokia’s only WiMAX product. It didn’t elaborate further but did say it still supported WiMAX technology. Just apparently not with commercial products.

The tablet, which carried a $450 price tag, was customized for the U.S. market, and Nokia jumping ship begs the question of WiMAX’s future in the States. Sprint-Nextel Corp. and Clearwire Corp. are leading the charge to get 4G deployed, but have hit rough times in the rollout of the “Clear” mobile WiMAX network.

Their partnership started with such promise when Sprint spun off its albatross-like Xohm WiMAX operation to Clearwire, which then reorganized as the “new Clearwire” with a $3.2 billion collective investment from Intel Corp., Google Inc., Comcast Corp., Time Warner Cable Inc. and Bright House Networks. It had planned to cover 15 million PoPs by the end of 2008 and coverage of between 120 million and 140 million people in the U.S. by the end of 2010.

It was enough to make the other cellcos, which are planning to deploy LTE as their 4G choice, fight the merger. The LTE standard was just recently frozen and so commercial deployment will lag that of WiMAX.

But then ... the dark times came. Economic crisis meant a pushback in rollout plans. A rebranding effort from Xohm to Clear muddied the consumer recognition waters. And most importantly, with WiMAX deployed in only Baltimore and Portland, Ore., it hasn’t lived up to its business model, which relies on widespread coverage and mass market deployment to give device manufacturers economies of scale to create WiMAX-embedded consumer electronics. Also, the $45 to $65 per month WiMAX data plans for something that can be used in only two cities via a laptop card might be hampering adoption to date.