[ieee technology - portland, or, usa (2009.08.2-2009.08.6)] picmet '09 - 2009 portland...
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WiMAX:Forecasting by integrating Scenario Planning and Bass Model methodologies
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AbstractThe primary objective of this paper is to develop a forecast for mobile WiMAX as an
emerging technology using Scenario Planning and Bass Model methodologies. To understand why these methods were applied in assessing a forecast for the adoption of WiMAX, the paper will discuss the technologiy's evolution, functionality, and market competition. Literature review on the methodology and applications of forecasting in the mobile communications industry will be considered to help provide examples of technology forecasting estimations.
The results obtained for each scenario will then be compared and analyzed to the behavior of WiMAXs subscribers in both the United States and Korea. The paper intends to discuss the differences in the United States and Korea models. Significant consumer interest variations, price, and population patterns are presented. The key to forecasting WiMAXsd ti t h l t i t d t d th diff i ti th t i tadoption technology rates is to understand the difference in consumer reactions that exists
within countries. The analysis will conclude that WiMAX will diffuse in Korea at a faster rate due to high response from imitators.
With big market potential and a clear vision of subscriber needs, the next major evolution is expected to occur in the area of personal broadband services. The WIMAX standard promises to deliver high speed, cost-effective and high quality services with long distance broad coverage.
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• Objective
Outline
• Objective• Technology Overview• Existing Technologies• Literature Review• Methodology
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• Analysis and Results• Recommendation• Questions
• Forecasting the diffusion and
Objective
• Forecasting the diffusion and adoption of WiMAX technology
• Focus on Mobile WiMAX• Understand specific consumer
behavior differences in the
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United States and Korea
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Key Problem• There is a global interest for wireless connectivity
Why now?
There is a global interest for wireless connectivity over long distances across more locations. Current wireless services do not meet consumer needs.
Proposed Solution• WiMAX: This innovation is expected to impact
business productivity as well as consumer interactions and utilization of the Internet.
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Existing Emerging
Technology Evolution
6Source: WiMAX Forum - Alvarion, 2006
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What is WiMAX?
• Worldwide Interoperability for Microwave Access
• Ratified 2005: IEEE 802.16 standard
• Metropolitan Access Network (MAN)
• Wired and wireless connectivity capabilities
• Merges broadband and mobility services Source: Kahn, 2005
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The WiMAX Forum definition:
“A standards-based technology enabling the delivery of last mile wireless broadband access as an alternative to cable and DSL."
Source: http://www.palowireless.com/i802_16/wimax.asp
mobility services Sou ce a , 005
How WiMAX works?
Components
Base Station: tower that connects to the network backbone
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Receiver: subscriber equipment that connects to base station
Source: Marshall and Grabianowski, 2004
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Existing Wireless Technologies
Source: WiMAX Forum, 2006
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Key Technology Advantage• Efficient Spectrum Allocation • Always On Connectivity• MIMO• Higher network speed
Methodology Approach
STEP 1: •Brainstorm situations that ld i t WiMAX
STEP 2:•Collect Analogous Product data based on market structure, t h l d t d
STEP 3:•Use penetration curves to d t i STEP 4:
•Compare each scenario
Determine possible scenarios
would impact WiMAXdiffusion
•Focus on product selection
•Consider whether culture, economy is a factor
Apply Bass Model to each scenario
technology advantage, and customer perception of technology benefits
•Weight each criteria
•Obtain p, q, m for each scenario
Graph output model
determine technology adoption rate
•Note innovator and imitator behavior
STEP 4:Compare real against forecasted results
•Identify disparities for differences: culture, economy, technology?
Data Collection
• Market and consumer behavior of analogous products in the United States
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• Market and consumer behavior of analogous products in Korea
• Economy, culture, population patterns and technology disparities between United States and Korea
• Clearwire and KT Telecom real user data
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Literature Review
Scenario Planning
• “The obvious value of scenario planning is that it allows policy-makers to make and learn from mistakes without risking important failures in real life” [1]
• “By creating storylines that cover a range of possible trajectories, it involves identifying factors that could drive change in a system, and then systematically varying those factors in narrative storylines about the future development of that system” [2]
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future development of that system [2]
• “One way to cope with uncertainties is scenario planning. It could reveal possible solutions for the future” [3]
Literature Review
Bass Model• It contains three parameters based on analogous p g
product Bass Model – p, q, m
N(t) = p + (q/m) N(t-1)
where,p = Coefficient of innovation (or coefficient of external influence)q = Coefficient of imitation (or coefficient of internal influence)m = the total potential market sizeN(t) = Total number of adopters of the product until time t
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• “The Bass model has significant implications for forecasting, decisions about new product viability, and product launch performance tracking”. [4]
• “The forces of innovative and imitative behavior are assumed to operate in the market and exert different effects on the rate of initial purchases”. [5]
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Scenario Selection
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United States Scenarios
100%100%
Bass Model Assumptions
0%
20%
40%
60%
80%
100%
0 5 10 15 20
Time
Mar
ket P
enet
ratio
n
0%
20%
40%
60%
80%
100%
0 5 10 15 20
Time
Mar
ket P
enet
ratio
n
14Source: Lilien et al., 1999
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United States Scenarios
• Innovators highly influence curve in the early years
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g y y y
• The number of imitators increases, the number of innovators decreases over time
• The influence of innovators is greater in Scenario 1 than it is in Scenario 2: consumers are more interested in mobility rather than high speeds
United States Scenarios
Real Data Comparison
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• Clearwire is not the only WiMAX service provider, but it has clear presence in the Portland area
• Economic slowdown
• Service is likely to be bundled with other service providers –WiMAX subscriptions are difficult to find
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United States Scenarios
17Source: Sekino et al, 2007
Korea Based Scenarios
Bass Model Assumptions
0%
20%
40%
60%
80%
100%
0 5 10 15 20
Time
Mar
ket P
enet
ratio
n
0%
20%
40%
60%
80%
100%
0 5 10 15 20
Time
Mar
ket P
enet
ratio
n
18Source: Lee, 2007
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Korea Based Scenarios
• Rapid growth due to high imitator adaptability: consumers in
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p g g p yKorea are familiar with wireless technologies so there is little interest for innovators
• Imitators highly influence curve
• The number of imitators increases, the number of innovators decreases over time
Korea Based Scenarios
Real Data Comparison
KT T l l d f ll f d l l
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• KT Telecom real data follows forecasted curve closely –dip in month 18 is explained:
• Competition with LTE introduction: Korea easily adopts new technologies
• Economic slowdown – private consumption decreased in 2008
2007year Q1 Q2 Q3 Q4 year
Growth rate of GDP 5 5.8 4.8 3.8 -3.4 2.5Private Consumption 4.5 3.4 2.3 1.1 -4.4 0.5
2008
Korean Economic Indicators (Korean National Statistics Office, 2009)
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Behavior Differences
What causes consumer behavior differences within the United States and Korea scenarios?
•Price: cost of broadband service is significantly higher in the United States
•Population Patters: • 68.9% of the Korean populations live in a metropolitan area, whereas many American still live in rural areas.
• Easier to reach new customers in metropolitan area
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• New technology is harder to adopt in rural areas, due to new infrastructures needed to offer WiMAX services.
•Technology familiarity: Korea is familiar with wireless broadband technologies; consumers are looking for faster service. US consumers are familiar with fixed network connection, but still exploring the possibilities of wireless.
Future Research
•Consider adding economic factors into bass model gformulation – sometimes income plays a big role whether or not consumers can purchase technology
•Set-up costs/infrastructure installation costs might affect diffusion curves in rural areas or developing countries
•Select different analogous products to calculate P, Q due to people behavior changes over time and
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due to people behavior changes over time and subjective selection of team
•Different methodology selection, compare with other methods (examples, linear regression, Delphi)
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Conclusion
• WiMAX is positively affecting everyday life of people around the world – cost effective solution that delivers broadband speeds and allows mobilitybroadband speeds and allows mobility.
• Korea will adopt faster: imitators have a higher influence
• Population patterns: 68% of Korean population live in urban, densely populated areas
• Price: service is more affordable
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•Technology familiarity: 92% of population uses broadband already; open to adopting new technologies
•Imitators dominate in Korea; Innovators play a significant role in WiMAX adoption in the United States
Back Up
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Parameter Mobile WiMAX Wi-Fi HSPA 1x EV-DO WiBro LTE
Standard IEEE 802.16e-2005 IEEE 802.11a/g/n 3GPP Release 6 3GPP2 IEEE 802.16e not available
Peak down link data rate
46Mbps 11Mbps 802.11b 14.4Mbps Rev A: 3.1Mbps; Rev. B 4.9Mbps
50Mbps 100Mbps (for 20MHz spectrum)
Peak uplink data rate 7Mbps 2Mbps 1.4Mbps initially; 5 8Mb l t
1.8Mbps 30Mbps 50Mbps (for 20MHz t )5.8Mbps later spectrum)
Bandwidth 3.5MHz, 7MHz, 5MHz, 10MHz, and 8.75MHz initially
20MHz for 802.11a/g; 20/40MHz for 802.11n
5MHz 1.25MHz 8.75 MHz 1.25, 2.5, 5, 10, 15, and 20MHz
Frequency 2.3GHz, 2.5GHz, and 3.5GHz initially
2.4GHz, 5GHz 800/900/1,800/1,900/2,100MHz
800/900/1,800 2.3Ghz-2.4GHz
Coverage (typical) < 2 miles < 100 ft indoors; < 1000 ft outdoors
1–3 miles 1–3 miles 1-3 miles up to 62miles with degradation after 19miles
Mobility <37mph Low 155mph 155mph <75mph < 310mph
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USAConxx offers Multi-Service Wireless Networks
AT&T Alascom is offering the latest in broadband technology in Alaska
DigitalBridge Communications launched the first commercially available WiMAX network in the United States in 2007 under the name BridgeMAXX. Deployments are in Idaho, Montana, Wyoming, Indiana, South Dakota, and Virginia.
MetroBridge Networks serves businesses in Arizona and Greater Seattle.
Nth Air holds a nationwide 3.65 GHz license. Nth Air is currently deployed in California and Nevada
Sprint Nextel holds licences in the 2.5 GHz band sprint currently introduced its first WiMAX operation in Baltimore under the brand name XOHM.
Clearwire holds 2.5 GHz licences in several regions, and is running a test market in the Northwestern United States in g , gpreparation to deploy a nationwide network to rival the other nationwide carriers.
NextWave Wireless holds licences in the 1.7 GHz and 2.1 GHz band.
NextPhase Wireless holds a national WiMAX license and LMDS in broad coverage areas over Atlanta, Southern California (Los Angeles), Miami/Fort Lauderdale and Philadelphia, Pennsylvania/Wilmington, Delaware/Trenton, New Jersey.
Xanadoo operates Navini Networks-based pre-WiMAX networks in the 2.5 GHz spectrum in 6 markets in the midwest.
Open Range Communications will build a 17-state WiMAX network providing wireless broadband to 500+ un-served and underserved rural American communities.
Conterra in Columbia, SC, Charlotte, NC, and nearby areas.
Quad-Cities Online will use 2.5 GHz spectrum in Illinois.
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RazzoLink carries WiMAX and pre WiMAX throughout Monterey County, California.
Rapid Systems uses WiMAX in the Tampa Bay metro area on the 3.5 GHz band.
Zing Networksis testing a new WiMAX Network in the Greater Metro Detroit Area
Sling Broadband Wimax broadband operator in the Greater Miami and Ft. Lauderdale Metro Area offering Wireless Metro Ethernet, Business T1 Service and Wireless Broadband Service
Towerstream offers WiMAX-based internet service to businesses in 9 US cities, including Boston, Chicago, Dallas, Los Angeles, Miami, New York, Providence, San Francisco and Seattle
Korea(South)WiBro is served by KT and SK Telecom.
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