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Alvarion's WiMax Road

Tel Aviv-based Alvarion (ALVR) is betting that WiMax will become the next big thing in personal mobile communications after Wi-Fi.

That's why Tzvika Friedman, Alvarion's president and CEO, made a strategic decision to direct as many resources as possible to the development of the not fully standardized WiMax technology, even if it's biting into the broadband wireless company's financials.

Because WiMax devices are not even commercially available yet -- and the process telecom operators have to go through to get WiMax frequency licenses is in many cases long and difficult -- Friedman expects a few more challenging quarters before Alvarion's WiMax sales pick up.

But given that this WiMax industry leader is trading roughly around $7 a share, and rumors of a possible buyout are abundant, some believe Alvarion is the right long-term WiMax play.

"I am very bullish on the WiMax potential," says Laura Goldman, president of LSG Capital, which is based in Tel Aviv and owns the stock. "I can see this market only expanding, so why not buy the stock when it's cheap?"

With $200 million in annual sales and operating expenses totaling about half of that, Alvarion just about broke even in the second quarter this year, after hovering in the red in previous quarters.

WiMax, which stands for Worldwide Interoperability of Microwave Access, is a wireless broadband technology that provides an alternative to wired broadband such as cable and DSL.

WiMax provides fixed, nomadic, portable and eventual mobile wireless broadband connectivity without the need for direct line-of-sight to a base station.

(Mobile means being connected at a driving speed, as with cell phones.)

In the emerging WiMax realm, Alvarion still enjoys an 80% market share. But Friedman acknowledges this situation won't last forever.

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