Nokia Chills on WiMax

Finnish infrastructure giant Nokia Corp. (NYSE: NOK) has reneged on an earlier commitment to the nascent WiMax wireless metro-area market, citing concerns that the technology is not nearly ready yet and in danger of suffering from industry overhype.

WiMax -- or 802.16a revision d if you prefer -- is the wireless industry’s latest lovechild. Fans of WiMax claim that the technology -- which is initially intended to provide fixed wireless high-speed data services over distances of 30 miles or so -- could replace everything from 3G cellular networks to DSL and wireless LAN.

Nokia was a founder member of the WiMax Forum, an industry body aiming to promote and certify the compatibility and interoperability of WiMax-branded broadband wireless products employing the latest revisions of the Institute of Electrical and Electronics Engineers Inc. (IEEE)'s 802.16a standard.

Despite its early interest, the vendor chose not to renew its membership earlier this year, believing that the technology is no longer a core business focus. Nokia is now absent from the Forum’s membership list on its Website.

“We were involved at the beginning, but after analyzing the business case we are not actively involved today,” comments Seppo Aaltonen, director of Nokia’s wireless technology marketing division [ed. note: and the lost Marx Brother]. “It is more of a monitoring position. Our short-term priority is to get WiFi and 3G technologies working... WiMax is not mature enough at the moment to commit too much to it.”

Aaltonen states that Nokia will continue to follow WiMax “very carefully,” but is unconvinced by its short-term market potential.

“Right now it may be a little overhyped. We see it as quite far away. Even though it is exciting, we need to be realistic about it.”

Nokia’s viewpoint contrasts vividly with recent announcements from network rivals Alcatel SA (NYSE: ALA; Paris: CGEP:PA) and Siemens AG (NYSE: SI; Frankfurt: SIE). Both vendors last month outlined plans to move into the market in 2005, using silicon from Intel Corp. (Nasdaq: INTC). (See WiMax Gets Serious, Alcatel, Intel Team on WiMax and Siemens Plans WiMax Move.)

Nokia appears unlikely to take such a route. “We have no product statements to make,” says Aaltonen. “I can’t comment on who will work with whom.”

— Justin Springham, Senior Editor, Europe, Unstrung