Is Wi-Fi a Threat to Third-Generation
Wireless?
By BILL ALPERT
How's this for an exciting new networking stock: Starbucks. Wednesday,
the coffeehouse chain announced that 1,200 of its cafes in the U.S. and
Europe had become hotspots for wireless networking. By year-end, the
Seattle-based percolator will rig another 800 cafes with the service known as
"Wi-Fi." The Wi-Fi technology allows a suitably-equipped laptop or
hand-held within a range of a couple of hundred feet to wirelessly connect to
the Internet, at speeds up to two million bits per second. The Starbucks
hotspots are part of the network run by T-Mobile International, a sibling of
Deutsche Telekom's VoiceStream Wireless.
At a monthly fee of $30 for unlimited local usage, and $50 for nationwide, the
Wi-Fi service costs half the rate of new third-generation data services offered
by cellular carriers such as Verizon Wireless and Sprint PCS. And Wi-Fi runs
10 times faster. That's why USBancorp Piper Jaffray analyst Samuel May
thinks wireless network technologies like Wi-Fi threaten the long-term
success of so-called 3G cellular ventures.
The viral proliferation of Wi-Fi hotspots around the world is one of the few
trends today that stirs memories of the Internet's unshaven youth. Hotspots
accessible at no charge are flagged by the Wi-Fi underground with
chalk-circle graffiti, or with postings to www.freenetworks.org and
wi-find.com.
To be sure, there's a hitch. Several, in fact. Free Wi-Fi nodes generally attach
to a fast Internet service provided by a cable modem or phone network. And
lawyers for those networks are starting to warn customers against picking up
Wi-Fi hitchhikers.
Geographic coverage of Wi-Fi hotspots is, uh, spotty in comparison with
cellular data services. Over time, nodes will fill in the dead zones, but then
users may be plagued by interference. Wi-Fi's grooviness, after all, comes
from its residence in unlicensed spectrum -- anyone can go on the air, without
paying a billion bucks to the Federal Communications Commission. When
nodes collide, the Wi-Fi technology has only three channels to divvy up
among Wi-Fi broadcasters.
The interference hitch seems addressable if Wi-Fi is succeeded by new
generations of wireless technology. Ready to elbow ahead of Wi-Fi, which
also goes by the nerd-name 802.11b, are new technologies with labels that
range from 802.11a to 802.11g. These wireless flavors feature a dozen
channels and potential speeds more than 25 times faster than Wi-Fi.
The market for Wi-Fi chips is dominated by Nasdaq-listed Intersil, with a
65% market share, according to Piper Jaffray analyst May. But faster
wireless technologies have been pioneered by privately held firms such as
Atheros Communications, of Sunnyvale, Calif. And many other publicly held
chip makers have introduced competitive wireless chips, says May, including
Agere Systems, Broadcom and Marvell Technology. The latter firm, for
instance, just announced a set of Wi-Fi chips that eventually could sell for as
little as $5. Such chips today cost $15 to $25. All this 802.11 activity may
raise the heat under competing communications chip makers, but it can only
benefit wireless users. And make hotspots into hot spots. |
