According to research of the Taipei-based Market Intelligence

& Consulting Institute (MIC) conducted as part of the ITIS

project, Taiwanese WiMAX CPE (Customer Premises Equipment)

industry shipment volume reached 844,500 units in the third

quarter of 2009, representing 56.7% sequential growth and

236.5% year-on-year growth. The industry's shipment value

reached US$68.8 million in the third quarter. The substantial

growth can be ascribed to WiMAX carriers' positive outlook for

subscriber growth in 2010, compared with the relatively

conservative stance in 2009, and these carriers have therefore

shown increasing demand for WiMAX CPE. In addition, the price

tags of WiMAX CPE have dropped to a level acceptable to the

carriers, which also played an instrumental role in the growth

of WiMAX CPE shipment volume.Thanks to the maturation of

network deployment, the quality of signal coverage and network

connections has seen significant improvement, therefore

enhancing subscribers' satisfaction with WiMAX services and

boosting the willingness to adopt WiMAX. At the same time,

owing to the rapid price drops of WiMAX access devices such as

indoor and outdoor CPE and USB dongles, WiMAX carriers were

able to plan more cost-effective service packages as the

burden of subsidies for CPE was lessened. ASP (Average Selling

Price) of Taiwanese WiMAX CPE shipments has come down to

around US$81.5 in the third quarter of 2009, down from

US$147.2 a year ago.Judging from these development trends, it

can be seen that the improvement of network quality and the

lowering of device prices are conducive to subscriber and

shipment growth. As most WiMAX carriers worldwide are still in

the initial phase of network deployment, it is projected that

there will be two to three more years of rapid development

before subscriber saturation.In the third quarter, 802.16e

products were the predominant type of shipment, representing a

share of over 98% in the industry's overall shipment volume.

In terms of function, indoor CPE was the leading shipment with

a share of 43.5%, followed by USB dongles with 23.6%. Outdoor

CPE shipment represented a share of 13.9%, while the shipment

share of other types of devices reached 19%, among which WiMAX

modules for use mobile Internet access devices emerged as the

most significant type of shipment. More than 30 models of

WiMAX-enabled notebook and netbook PCs have already been

launched in the market. It is expected that the number of

WiMAX-enabled mobile Internet devices will continue to grow

along with the maturation of WiMAX networks. Therefore, it is

projected that WiMAX module shipment volume will see further

growth in 2010.According to MIC Industry Analyst Xiang-Yu Yen,

"currently most major WiMAX carriers or system integrators

seek to transplant their network deployment experience, CPE

testing experience, and business models to other regions. It

is expected that in 2010, WiMAX carriers, branded equipment

vendors, and system integrators will wield greater bargaining

power for CPE prices by leveraging economies of scale." Mr.

Yen added, "as a result, Taiwanese CPE makers will see gradual

declines in gross profits and will have to expand production

volume and market share so as to maintain their lead in the

market. At the same time, it is expected that Korean and

Chinese equipment companies will continue to make gains in

market share. However, as they mostly have their own

production operations and rarely outsource production to

Taiwanese makers, it will pose a crucial task for Taiwanese

makers to break into their supply chains so as to boost

shipment volume."It is projected that boosted by growth in

Russia, India, and North America, Taiwanese WiMAX CPE shipment

volume will top 1.1 million units in the fourth quarter of

2009. Looking ahead to 2010, with the expansion of WiMAX

service coverage in North America, issuance of spectrum

licenses in India, and further promotion of WiMAX services in

Brazil, Malaysia, Indonesia, and the Philippines, it is

forecasted that Taiwanese WiMAX CPE shipment volume will

continue to grow in the first three quarters of 2010.