The 3G iPhone = Clearwire’s Biggest Hurdle

After a week of all 3G iPhone all the time, it’s pretty clear that the performance hurdle is being set for the “new” Clearwire and its planned nationwide WiMax network: Devices will need to look and perform reasonably like an iPhone, at as-fast or faster speeds, for lower prices, to get any traction at all. Luckily for Clearwire and its partners, those barriers aren’t insurmountable, but there’s also not a lot of time or chances to get things right. As we say in our most recent revision of our WiMax report, it’s still Game On, WiMax. But Clearwire better hurry, before Apple and AT&T run the table.

On the device look-and-feel front, it seems like Clearwire should be safe — WiMax partner Samsung is already showing a touchscreen iPhoneClone, and Google’s Android interface looks sufficiently iPhone-enough to compete, should it arrive as scheduled. On the speeds front, Clearwire should be able to make the 3G iPhone look pokey, if the company actually delivers its promised speeds of between 2 and 6 Mbps on the download side. Since Clearwire claims in its official merger filing with the FCC that its networks will support mobile two-way video, it appears that the folks on the networking side are pretty confident. That leaves us with pricing plans as the place where Clearwire might stumble in its bid to unseat the iPhone.

With an upfront cost of $199 and monthly plans of $60-70 for voice and data, the 3G iPhone isn’t cheap, so Clearwire seems to have some breathing room, especially since Clearwire service plans are likely to include a bundle of home and mobile Internet service for the same customer. But since Clearwire doesn’t plan to subsidize device costs, it will have to do a lot of marketing to convince customers that it may be cheaper in the long run to buy a more-expensive device and pay less per month; it will then have to turn around and sell an opposite story to Wall Street, claiming it can make more in revenues by signing more customers to cheaper contracts, including those for ad hoc or daily use.


Clearwire may get an additional break or boost if AT&T and Apple run into network congestion problems following the July 11 availability date for the 3G iPhone. (Wonder if we can get odds on the downtime next week at NXTcomm in Vegas?) Ideally, Clearwire would start some limited public tests as soon as possible to give users a taste of what a 4G device could look and feel like. Until then, all we’re likely to hear is how much the fanboys love their 3G iPhones. The louder that chorus gets, the harder it will be for Clearwire’s song to be heard.

Need to know more about WiMax? Order our recently updated WiMax report, with full analysis of the “new” Clearwire deal and the motivations for investors Comcast, Google, Intel and others.

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