There are thousands of Innovative products available in today’s market.

It is amazing how a simple

innovation adds market values to a product and converts it to one of the best buys among the consumers.

The purpose of this report is to evaluate a product in terms of technology and business. The report
discusses the existing product and its technology, the new technology used to innovate the product and
the new innovation which combines these two. Report also analyzes how the strengths, weaknesses,
opportunities and threats of the innovation involve in marketing and financial implications.

Existing mobile phones in general and the innovating WiMAX mobile phones in contrary are used to
evaluate the differences in market value in this report.

A mobile phone (Invented in 1946 by Motorola also referred to as a handphone or a cellphone is a mobile
electronic telecommunication device (Figure 2.1.1 shows the basic internal electronic modules and
integration used in a mobile phone), which connects to a wireless communication network through radio
waves or satellite communications (Mobile phone, 2006). This communication network allows a mobile
phone user to call any phone anywhere around the clock, to access Internet and use data services on the
go.

Figure 2.1.2 shows some examples to mobile phone usages.

An overall cellular network contains a number of diverse elements from Base Transceiver Stations (BTS)
connecting to a Base Station Controller (BSC), then Mobile Switching Centre (MSC) connecting to
Location Registers (HLR and VLR) and finally linking to the Public Switched Telephone Network
(PSTN).

BTS is a radio transceiver; the mobile phone’s only access to the network and is located in a geographical
area called a Cell. Cells may be tightly clustered or spaced far apart and can have different sizes
according to the traffic and to the geographical factors such as trees, and buildings in a given area, as
shown in Figure 2.2.1.

Figure 2.2.2 clearly explains the signal flow through a cellular network when making a call.

First the phone will search and connect to the strongest signal BTS, which most of the time is the nearest.
A set of BTS are connected to a particular BSC. BSC controls BTS signal transmit power and manages
the Handover (Handover from one BTS to another when phone is moving from one cell to the other, this
is how the mobility being given to the network).

BSC will make sure the minimum required power is used, so the limited number of frequencies (GSM-
1800 uses 1710–1785 MHz) given for a network can be re used in a non adjacent cell.

Then the BSC forwards the call to a MSC to verify the subscriber details (subscriber details are matched
from the VLR and HLR Data Bases to a mobile’s SIM card identifier). Once approved, MSC will routes
incoming and outgoing calls to and from the PSTN or other cellular networks accordingly.

First Generation (1G) mobile phones were designed only for voice services and were using analog signal
transmitting. A subscriber needed two temporarily dedicated channels (a radio frequency band) to
communicate with each other (one for incoming and one for outgoing - full duplex) resulting limited
number of simultaneous calls (approximately 3 simultaneous calls by mid 1980’s) given the limited
number channels per network.

1992, together with the introduction of GSM (Global System for Mobile Communications) which used
digital signaling, data services (Short Message Service - SMS) were introduced to the mobile phones.
Digital access technologies (e.g. Time Division multiple Access - TDMA), multiplied the number of
simultaneous calls while standardizing the technologies globally and reducing the connection problems
raised when making international calls due to different network standards. Figure 2.3.1 shows the mobile
technological evolution in a table form.
WiMAX (Worldwide Interoperability for Microwave Access) is a broadband wireless point to multipoint
specification from IEEE 802.16 working group, introduced in June 2001 to promote IEEE 802.16
standards. The WiMAX forum (Figure 3.1.1) describes WiMAX as "a standards based technology
enabling delivery of last mile wireless broadband access as an alternative to landlines".

WiMAX is a cost-effective option for broadband services. It is able to provide wide area coverage and
quality means for applications ranging from real-time streaming video and non-real-time downloads to
real-time delay-sensitive voice-over-IP (VoIP) due to high data rate capacities. WiMAX’s QoS (Quality
of Service) assures low latency for mission critical applications and gives a competitive advantage
compare to similar technologies.

With the usage of OFDM (Orthogonal frequency-division multiplexing) signal modulation, WiMAX has
achieved a high data rate speed and a wider are of coverage compared to other Wireless broadband
technologies.

There are 2 types of modes in WiMAX connections, non-line-of-sight mode and line-of-sight mode which
WiMAX will use in combination for broadband access.

In non-line-of-sight mode, a small antenna on the computer connects to the WiMAX tower (up to a 70
miles radius in ideal situations) where WiMAX uses a low frequency range (from 2 GHz to 11 GHz -
similar to Wi-Fi) since low wavelength transmissions are not as easily interrupted by physical
obstructions.

In line-of-sight mode, a WiMAX tower points straight at another WiMAX tower. The line-of-sight
connection is stronger and more stable and has a higher data rate (shared data rate of up to 70Mbps) with
lesser errors. Line-of-sight transmissions use higher frequencies (66 GHz) which have fewer interference
and lots more bandwidth. All these were achieved by the usage of OFDM in signal modulation.

WiMAX towers connect to the Internet Service Provider (ISP) cabled network to complete the
network. Figure 3.2.1 shows network connections in WiMAX to access the Internet.
With the approval of IEEE 802.16e Mobile Wireless MAN Standard (Mobile WiMAX) in 2005, Samsung
(A Mobile Phone Brand) innovated the world’s fist 4G WiMAX mobile phone, Samsung M8000 (Figure
4.1.1) and displayed in 2006 at a Consumer Electronics Show in United States for the first time. HTC (A
Mobile Phone Brand) has also come up with a 4G phone which operates with WiMAX, HTC Max 4G.

Samsung has combined both mobile phone technologies with WiMAX for M8000.
As showing in Figure 4.1.2, in mobile WiMAX, existing BTS have to be replaced with WiMAX towers.
The Cell sizes will be larger compared to a GSM Cell reducing the number of towers required per area,
given WiMAX’s large area of coverage. GSM voice transmitting services and GPRS/ UMTS data
transmitting services have to replaced with mobile WiMAX, which provide IP (Internet Protocol) based
broadband data services and VOIP (Voice Over IP) voice services to the customer.

Figure 4.1.3 summarizes the HTC MAX 4G’s product specifications. It is amazing what an innovation
can add to a product to improve the performances.

This new innovation allows customers to use real time HD (High Definition) applications to run
in a mobile phone by make using the high speed data rates available in WiMAX technology.
QoS specifications in Mobile WiMAX will allow low latency for mission-critical applications
and applications running in the mobile phone will have the required priority accordingly. OFDM
modulation’s high immune to interference comparatively and the ability of switching from one
modulating technology to the other to match the existing conditions will add higher reliability to
the network while enhanced power management modes and smart antennas will allow user to use
the mobile phone for a longer period of time without re-charging.

These plus points are to reduce current problems faced by mobile phone users. Advertising these
points will increase customer desire to buy or at least try the product. Data users are the one to
benefit more by using a WiMAX phone. Hence the marketing strategy to be specifically focused
on high data users such as working adults and teenagers.

Due to the usage of unlicensed frequency spectrum, mobile WiMAX charge less and per month
basis instead of per usage basis compared to other data services. Service providers will gain
advantages due to the need of fewer WiMAX towers to attain a desired data density. The
example in Figure 5.1.1 summarizes the reduced number of towers (Base Stations) necessary to
achieve a specific data density over a given coverage area comparatively.
Fewer towers greatly reduce the network’s capital costs and added lower equipment maintenance
and operating charges reduces the costs and benefits both providers and customers. This in return
increases the per product worth to the consumer.

A lot of users trying to access the same tower, same time may cause a drop in signal quality due to the
band width sharing nature in mobile WiMAX. Even though WiMAX is promising a maximum 70Mbps
range ideally, in practice a mobile user in a speeding vehicle or a user in a network congested area will
experience a considerable speed and bandwidth drop inevitably (Figure 5.2.1).

Depending on the severity, bad weather could interrupt the line-of-sight signals and can cause partial or
even totally disconnections. Mobile WiMAX phone’s data rates are still slower compared to other
network such as fiber optics, satellite and cables.

This product may not satisfy customers who are looking for a replacement for those existing broadband
technologies. The concerned target market for this product is looking for an inexpensive yet satisfying
mobile technology. Hence the effect of these drawbacks for the target market to be minimal. Low quality
in congested network is a common nightmare in all existing mobile technologies. But the low external
noise interference in mobile WiMAX will still have a higher chance when it comes to customer
preferences.

Main weakness in this product is the unmatured technology infrastructure. Mobile WiMAX is still an
emerging technology and the infrastructure is yet to buildup in most parts of the world. Spending an
enormous amount of capital for installation of the heavy structure, tower, antennas etc makes the network
collectively a high cost network.

Mobile WiMAX phones can use both WiMAX and existing GSM infrastructure. The phone switches
automatically in order to suit the current network. This allows WiMAX mobile phone users to use GSM
(most popular mobile infrastructure) for voice and WiMAX/GPRS for data services and solve the
problem of using the phone areas where there’s no mobile WiMAX is available. Even though the cost is
high on short term, in long run the service providers will still benefit from the vast amount of willing
subscribers.

Mobile WiMAX said to be the best cost effective solution for rural areas due to the large coverage area
per tower. Its wireless nature reduces expensive long cable runs in large rural areas. As shown in Figure
5.3.1, India itself has a lot of rural areas which yet to have a good telecommunication coverage. This
gives a great opportunity to implement Mobile WiMAX networks and in return selling more Mobile
WiMAX phones to use the infrastructure and increase the revenues.

Mobile phone market is picking up around the world (Figure 5.3.2) and it has forecasted to pick up in the
future. With cheaper subscription charges, this phone has a higher chance of growth in the future market.

HD (High Definition) and real time applications (Real Time Stock Updates) are a growing trend in
today’s world. These high end applications need high data rates speeds in order to view in a mobile
platform, and this will also give mobile WiMAX phones a higher chance to thrive in future markets.
Below Figure 5.3.3 shows the growing data usage and Figure 5.3.4 shows the growing number of
forecasted mobile WiMAX subscribers which proves the consumer acceptance despite the product
weaknesses.

3GPP Long Term Evolution (LTE) is planning to improve existing GSM/UMTS and AMPS/TIA to suit
4G phone needs. LTE said to provide a more gradual upgrade for their networks and subscribers (GSM is
the dominant mobile standard with more the 3 billion customers as of February 2010). LTE is expecting
to provide higher data rate transmissions compared to WiMAX and mobile phones using LTE will have
higher data rate transmission capabilities accordingly.

This is the greatest threat that WiMAX will face in future. But as showing in figure 5.4.1 the high signal
immunity to interference (because of the OFDM modulation) and supporting high data rates are expected
to help overlook this threat and to make manufacturers and customers to invest in this product without a
terror .
Before this remarkable innovation, customers have to use two different and expensive technologies to use
voice and data separately. Mobile companies have to have enormous number of BTS to cover a single
area of transmission. High data rate applications such as real time applications were not possible in
mobile phones. But WiMAX phones have made all a reality. The IP based Mobile WiMAX phones make
it a compelling solution for high performance, low cost broadband voice and data services compared to
the existing GSM/UMTS/GPRS mobile phones.

It is true that WiMAX mobile phones do have its disadvantages and threats. It is new and the technology
still needs to mature. These are the hurdles that the suppliers have to solve over the time to reduce the
marketing complications. Future threats will pose a huge financial risks and uncertainty among the
retailers. But the irresistible advantages and vast amount of future opportunities will help to market the
phone easily and to gain popularity among the mobile users and service providers.