and that is despite a no-show for a new WiMAX Smartphone.
What has become increasingly clear is that incumbent operators are being driven to deliver the hottest new web-devices including SmartPhones, tablets, eBook readers, netbooks, notebooks, data modem dongles, and RAN WiFi routers. After many years of 'in the near future' promotion of mobile video, the bandwidth gobbling video application have arrived.
Even while Clearwire struggles to fill up the supply pipeline with comparable hot devices, the industry is propelling towards greater use of their most precious commodity: spectrum/bandwidth capacity.
Clearwire is, above all else, a 'spectrum play'. Its almost as if Clearwire can just sit back and let incumbents slug it out to out-iPhone the iPhone phenomena even though that has already led to network congestion. Investors might even question the premise of building out the WiMAX network: why build out the spectrum with anything so long as the industry becomes a snowball rolling downhill, building speed and girth? However, if not for the nudge from the WiMAX effort, Google, Apple, and other catalysts, incumbents might have sat on their 3G walled garden fences longer. It makes some sense to say "Let the market comes to us rather than chase it": Clearwire's numero uno advantage is 'WBB spectrumj'; that is spectrum that is well suited to evolving towards high spectrum reuse needed to deliver 'true 4G' capacity. All the user needs to know about that is what gets delivered: 'True 4G' is the bandwidth needed to receive and send videos and other bandwidth hog applications/content. So long as the revenue develops sufficiently, Clearwire can continue to build their network denser, use more of the available 120MHz+ spectrum, and shift to WiMAXm-Advanced once the next version becomes commercially available (it is upgradeable and backward compatible with the current pre-4G version).
A big question is "What are other operators going to do to increase capacity needed to handle all the new devices, content and applications?" Verizon, AT&T and T-Mobile will roll out 3G-LTE which will satisfy bandwidth demands for a while. But each will face problems if the current bandwidth demand trends continue, let alone accelerate as we forecast. The bottom line is, as CTIA has advocated, operators need much more spectrum, CTIA wants 800MHz, where that will come from is very clouded by history.
Clearwire has moved up and down more extremely before, with NO news whatsoever.
No one is denying the trend of greater bandwidth usage. The question is, when will it be so high as to force consumers and even carriers to choose(and pay for) Clearwire? Can Clearwire survive the wait?
In the past few years bandwidth use of cellular networks has increased dramatically. And obviously, as new applications are found and new users are converted everything suggests that usage will go up. But there is a difference between necessary bandwidth and "would be cool to download this 2 seconds faster" bandwidth.
What does the average non-filesharing household bandwidth usage look like? Has it gone up in the past few years? Sure. How close are they from effectively utilizing the 10, 20, 50 Mbps internet connections available today? The truth is that, even for a DESKTOP system (exluding torrent-whores), a few Mbps is enough.
Unlike regular computers, handset bandwidth usage is limited by power usage, screen size and storage space. How long does my Ipod touch last when streaming Youtube? An hour and a half maybe? How do the Youtube videos look on it? Excellent.
The truth is that "good enough" is not a bad thing, as long as it really is "good enough". And it has won out in the consumer world many times before. Do you download music? A few years ago, 128kbps mp3s were the norm. Then 192kbps. Now ITunes serves up 320kbps. How long until the norm reaches the uncompressed formats (10x the size of 320kbps)?
Once bandwidth, like anything else, reaches a "good enough" point, the value of each additional bit/second drops dramatically. Basing a whole business of Clearwire's scale on that low value past the "good enough" is a losing bet to me.
These conclussions are as misguided as your earlier positions of the ultimate triumph of WiMAX over LTE and how embedded WiMAX consumer devices, mobile VoIP, the grid and the cloud were all going to propel CLWR to financial success. But not a single one of these things have happened.
Finally you've reached the conclusion that whatever technological and shedule advantage CLWR's WiMAX once had is not enough to win against the strength of larger incumbents and that CLWR is basically a spectrum play.
But to suggest that CLWR's shareholder's can achieve financial success just by "sitting back" and waiting for incumbents networks to collapse under the weight of their own success is equally naive.
CLWR is burning cash at about $1.8 billion every 12 months and every new market CLWR launches increases their OPEX. Since CLWR's market penetration, ARPU and gross margins are low, they do not produce positive free cash flow which means their cash burn increases with every new market launched. Their current cash position gives them maybe 24 months before they are back to the capital markets diluting shareholders again, and again.
And all the while CLWR is waiting for the rest of the industry to fail, CLWR can dilute itself into being a penny stock just like XM Radio, Winstar, and Teligent that also held nationwide spectrum and had unprofitable operations.
When that happens vulture buyers can swoop in and buy up the failed assets on the cheap. What kind of business plan is that?