Saturday, February 05, 2000
Forget AOL -- the future is wireless
And Canadian firms are ready to ride the wireless wave
Paul Kedrosky
National Post
Pity a certain perpetually wrongheaded Canadian newsmagazine whose name starts with "M." A week or so ago it apparently discovered the Internet, deciding that the AOL-Time Warner deal was worth some hand-wringing about the future of technology in Canada. Hey guys, the world has passed you by. Wireless Internet is the most important thing in our technology future, not some ossified dinosaur like AOL.
To prove it to myself, I recently indulged my inner geek by installing a wireless network in my home. While there were some annoyances getting things going -- mostly because I have a bad habit of installing first, and reading instructions later -- within 30 minutes the invisible network was up and running.
Lights were blinking and bits were blasting back and forth from my laptop out on the deck to a computer in the bedroom. I could surf the Web, grab e-mail and transfer files at the same speed as I was used to with wires -- but there weren't any wires. Matter of fact, bits seemed to be travelling so fast, I kept expecting to see the odd flash of digital tracer bullets.
It is that combination of convenience and gee-whiz wonder that has investors, entrepreneurs, the venture capital community and gadget-heads collectively giddy with excitement over wireless technologies. While being able to create a home network without cables is a fine thing, it pales beside other killer applications for wireless. For example, imagine simple, Web-like access from hand-held devices to movie schedules, e-mail, calendars, news and stock trading.
In the same way that networking computers goosed productivity in the 1990s, it seems clear that wireless technologies will goose things again. While it may not be the second coming of the Internet, I think there is a better than even chance that wireless kingpin Nokia will be right with its self-serving prediction that in three years, most Internet access will be wireless. And judging by Nokia's recently announced fourth-quarter results -- the $19-billion company grew by an astonishing 48%, and had almost 20% operating margins -- most of those people will be using Nokia phones.
With all the excitement, it was interesting that a recent Reuters article opined that Canada had become a wireless hotbed. It isn't -- yet -- but there are some Canadian stocks to watch.
Leaving aside the big and obvious one -- Nortel -- perhaps the most interesting wireless story remains Waterloo's Research in Motion. Others can spook you with the valuation scare story -- the company has sold $78-million (US) in souped-up pagers, against a $4.5-billion (US) market capitalization -- but I'll just tell you that those pagers are wonderful things.
The company's Blackberry device is about the size of a business card and perhaps half an inch thick. You can use it to send e-mail from anywhere. There are two nifty things about the device: First, it has well-thought-out ergonomics. From its thumbwheel for scrolling through messages, to a remarkably serviceable miniature keyboard, the thing works. Second, you can use your regular e-mail address and you are permanently connected. These have all been real bugbears for the wireless crowd.
While the Blackberry won't replace anyone's personal computer any time soon, it does for the first time raise questions about the PC's position. What if viewing the Web largely through the prism of big and monolithic personal computers is no the way to go? I find myself thinking similarly the more I access the e-mail and the Web through everything from pagers to cellphones: computers seem big, clunky, and unnecessary.
And devices aren't the only place in the wireless market where Canadian investors and companies are playing. Unless you were hiding under a rock, you probably heard about the initial public offering from Toronto-based 724 Solutions. As has been discussed endlessly elsewhere, most of its sales are really demonstrations of concept to banks or other financial institutions that have equity in the company. But that's the way it goes in a fast-moving market like wireless: Big bets get placed early.
Another Canadian example: Calgary-based Wi-Lan is on a quixotic quest to try to convince the networking industry (read: Cisco) that it should license its patent for its engineeringly over-exact (and horribly named) "wideband orthogonal frequency division multiplexing." Translation: a nifty and innovative way of corralling wireless data so that said networks' performance can be 20 to 25 times faster than they are at present.
Yet another Canadian wireless company is Infowave, right here in Vancouver, British Columbia. Like its Ontario cousin, Infowave has a product (called Symmetry) that delivers wireless access to Microsoft's various and sundry mail and scheduling applications. Unlike Research in Motion, it sells its tools to all comers. In a measure of investor exuberance in this area, however, the company's stock has gone from $2.95 to $29.75 on the back of its wireless tale -- a tale that in the October quarter accounted for $178,000 of its $3.4-million in sales.
Are 724, Wi-Lan and Research in Motion going to be the next Nokias? No way. Come and tease me in a decade if it happens. But that's not the point. The market is way out in front of the media and most of the rest of us, placing high-risk bets on unknown companies. Wireless is changing everything. In a few years, that Canadian newsmagazine might just figure all this out.
Paul Kedrosky is a professor of business at the University of British Columbia. |
