Wireless Craze
January 31, 2000
by Robert McGarvey
"This is the Wild West - wireless makes the Internet look tame," says Donna Oliva, CEO of W-Trade
Technologies, a company that's putting banking transactions on cell phones and PDAs.
Wherever you go, the hype is deafening: Wireless is king. Long live handheld computers.
Wireless proponents point to analyst forecasts to back up their belief that this market is
exploding. According to Datacomm Research, by 2003, shipments of "smart" phones and
handheld Internet devices will exceed 350 million units. Cahners In-Stat Group forecasts
that wireless data users in enterprise segments will multiply more than tenfold, from 784,000
in 1999 to nearly 9 million in 2003. And the Yankee Group predicts that total wireless
subscribers will hit 1.26 billion by 2005, up from 469 million at year end 1999.
"I call this the Second Coming of the Internet," says Felix Lin, CEO of AvantGo, a provider
of content - news, weather and sports for consumers, as well as custom applications for
enterprises - that's optimized for viewing on the tiny screens of mobile devices. "PDAs and
cell phones are much easier to use than desktop computers," says Lin. "This allows content
providers to really touch people. The handheld Web is much more powerful."
"This is the Internet all over again," adds Ken Nelson, CEO of KenTech, a developer of
custom handheld apps. "This space is just exploding."
But before you get caught up in the wireless euphoria, take a deep breath, then ask: Is anybody making money
developing wireless applications? Hah, laughs Brian Cotton, an analyst with IT consulting firm Frost & Sullivan.
"Wireless is coming on strong, but revenues are in the future."
Lance Travis, research director for enterprise architecture at IT consulting firm AMR Research, agrees: "We're a
ways away from seeing anybody making money with wireless apps."
Show Me the Apps
Getting applications - powerful, exciting software tools - to work on wireless devices and handheld PDAs is
more than a race for cash, it's also the sine qua non for legitimizing the sector. "We're still at the toy stage," says
Travis. "There's nothing about them that compels a user to want to use them. I can get baseball scores on my
car radio. Why do I want them on a cell phone or PDA? Wide deployment will follow the apps."
"As useful apps come along, that's when the technology ceases to be gadgetry and becomes tools people use,"
agrees Clarence Wesley, general manager of Xerox Mobile Solutions (XRX), a group formed to develop wireless
applications. "The vendor hype surrounds the technology, but technology isn't what's important - it's the apps,
the uses."
Hundreds of companies, most of them tiny, are plunging headlong into this void. "Applications leadership is up
for grabs," says Ira Brodsky, president of Datacomm Research. "It's a whole new cottage industry." The output
of these many cybercottages ranges from one-off custom programs written for a single corporation to more
ambitious applications targeted at broad-based markets.
The one constant is that application developers are hedging their loyalties with multiplatform compatibility,
designing programs that run on both phones and PDAs. That's because nobody can say which devices will
spring triumphant out of today's cluttered marketplace. (Interestingly, handheld PDAs are clumped with wireless
phones, even though the vast majority of PDAs are not wireless-capable.) So most developers are aiming for
their apps to work as readily on 3COM's (COMS) Palm IIIx with an attached landline modem as on a wireless
Palm VII or a Nokia mobile phone. "People probably will want many types of devices," says Jonathan Ruff,
senior manager for business development at Motorola (MOT).
While no clear-cut favorites have emerged among application developers, now's the time to start picking horses.
"There's lots of money in this space. Many bets are being placed," says Ed Cluss, CEO of InfoGear, developer of
IPhone, an Internet appliance. "And many bets will go bust. There is a lot of volatility in this space." |
