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Mobile Wireless
Monday, July 1, 2002
IN STAR TREK (V 1.0), CAPTAIN KIRK USED to say "Beam me up, Scotty", and then he'd dissolve into a kind of dot matrix cloud, to be reconstituted, intact, back on board the Enterprise. Did you notice there were never any wires? Nor any need for hotspots. Kirk and his buddies always got everything they needed, right away, through what appeared to be pagers. They didn't lug around a bunch of equipment. They weren't always looking for phone jacks. Their batteries (if there were any) never died. They never had connection issues. They had so few encumbrances that they didn't even seem to need pockets in their uniforms. They traveled pretty much like nomads—peripatetic "untethered" workers—on their five-year mission to explore strange new…well…you know the drill. The point is: They lived in the ideal mobile wireless world-the one that we're being promised now.

It's a ubiquitous, invisible, non-intrusive, easy world, where we have the information we want, wherever and whenever we need it. Forget the heavy laptops; dispense with limited applications; lose the myriad batteries. Our cell phones will always work; we won't have to strain to read tiny PDA screens; we'll have so little carry-on that we'll never have to be stopped at security again.

Well, we're nowhere near there yet. Granted, we're not going to have to wait until Kirk's 23rd century to get unwired, but we are a good deal further away from Utopia than the hype might lead you to suspect.

That being said, the promise and attraction of mobile wireless, with its unsolved technology challenges, is creating a whole new world of opportunities. There are "giants" already showing interest in the field: Nortel, Cisco, Nokia, 3Com and Lucent to name a few. But experience has shown that with a business opportunity of this sort, the ultimate victor is likely to come from under the radar.

Witness recent history with the last two revolutions of the PC and the Internet. In both cases, the companies that came out on top began behind both incumbent leaders and first-movers. Microsoft took the PC world, besting first-mover Apple and leaving IBM and long-forgotten Osborne and Eagle in its wake; Cisco took the Internet, besting IBM (again) and other road kills.

Gazing at the Stars

In 2002 there's no hotter topic than mobile wireless and there's probably no better place for an entrepreneur to be because it will be the next computing platform.

Mobile wireless enables the convergence of the two most rapidly adopted technologies in history - cell phones and the Internet. And what consumers clearly want is high-speed, easy, inexpensive merged voice and data handheld devices for always-on communications and access to business and personal information, as well as entertainment and services.

The significance of the mobile wireless market opportunity cannot be overstated. The mass adoption of cellular phone technology has made it abundantly clear that mobility and communications are a winning combination. More than 407 million mobile phones shipped in 2001; by 2005 it is estimated that fully one-quarter of the world's population will have them. In the US alone, every second child, between the ages of seven and 16, has a cell phone. According to Cahners In-Stat Group, within two years, 43 million American young adults will be demanding mobile wireless voice and data services.

All of this translates into a mobile wireless economy based primarily on voice service, that is close to $1 trillion today, equivalent to over 2 percent of the world's GDP, with the potential to reach $2 trillion by 2005 as voice service revenue continues to increase and enabling technologies make data service revenue meaningful. No other technology could claim this kind of impact.

And, these numbers are spread across a truly international business. The US represents only 15 percent of the market (versus a typical 40 percent + of a new technology market). The US is behind the rest of the world in mobile wireless largely because of sunk costs and entrenched habits associated with its "wireline" infrastructure. Europe and Asia have, by comparison, effectively leapfrogged the wireline stage.

Mobile wireless will be an economy beginning with a global base representing the most lucrative and accessible market ever. There are business needs and consumer wants. And thats only the beginning of its market potential.

Back Here on Earth

But, today, mobile wireless is roughly analogous to the way PCs were before the Macintosh and desktop publishing or the Internet before the browser and Web sites. And, like the pre-Netscape Internet, the most popular wireless data application is e-mail.

Myriad established and start-up companies are vying to position their technology approaches as the only way to address the existing poor quality, bad coverage, limited availability, questionable security, and high cost of mobile wireless solutions. Other challenges include throughput, integrity and reliability, network compatibility, interoperability, interference and coexistence, licensing issues, scalability, battery life and safety.

From a consumer perspective, "mobile wireless" today equates to "overload." Wanting all their resources everywhere, all the time, today's mobile wireless consumers are virtual packrats. (And this was supposed to make things easier!) Users carry cell phones, handhelds, and laptops. Not to mention batteries - all kinds of batteries, different batteries for different devices. Service is spotty. Results are poor. Costs are high. Interoperability is still a dream. Those tiny keyboards and eye-straining screens add to the frustrations. And yet, the attraction is so great and the desire so strong, that pioneering mobile wireless consumers put up with it all and look forward to a better day.

Mobile wireless today is flailing around in a "technology soup." Nothing talks to anything else. No clear standards have as yet been established. For instance, Europe has GSM as a single wireless bandwidth standard. In the US, CDMA, TDMA, and GSM protocols have already created issues of incompatibility that are slowing wireless progress. At this early stage in the mobile wireless cycle, knowing when to jump behind a standard or how to judge regulatory winds will be a key differentiator between companies that are here to stay and those that will fail.

Meanwhile, philosophically, each sector, and each company within a sector, has a clear view of how things "should" be. But one man's "clear" view is another man's "muddy waters." As companies jockey to claim leadership and impose their solutions, opportunities will arise in mediating between different technologies and developing real business models to deploy them.

Just as we saw in the PC and Internet eras, there will be a lot of hype, some innovation, a good deal of failure and the occasional success, all within the context of a messy situation created by governments, carriers, and equipment providers.

Exploring Strange New Worlds

The network for mobile wireless requires major reengineering to address issues for users, the technology, and the providers. An application development platform for mobile wireless has yet to be defined. The UI and device display that are both comfortable and intuitive have not been found. When these three major challenges are met, the mobile wireless market will truly explode.


There are opportunities in software, hardware, infrastructure, data and content services, and systems integration. Routers, broadband service, voice-data bridges, and chip solutions are among the technologies now finding VC funding. There are opportunities no one has yet identified and some, undoubtedly, that look hot now, but which will quickly disappear (think WAP). Security, privacy, and legal issues will keep innovators, governments, and the legal profession busy.


The Mobile Internet will not be controlled by a single carrier. The solution doesn't abide in the fixed Internet. What will emerge is a new type of network incorporating new business models, involving new technologies (and combinations of new technologies), hardware, software, system integrators, data and content services. Each of these sectors is wide open to innovation.



To Seek Out New Life and New Civilizations

With all this said, there are some fantastic examples of very exciting applications and services being pursued today.


Bluetooth has shown encouraging signs. Texas Instruments alone will ship 40 million units of Bluetooth chips in 2002. But Bluetooth is not, and will not be, the only standard to prevail. Already, millions of laptops are untethered and more than 200 companies are now producing WiFi components and systems in a $2 billion per year equipment market. There's room to develop products and services based on UWB, IrDA, and SWAP. Others will emerge.

The Japanese NTT DoCoMo I-mode service, launched in January 1999, had 30 million subscribers barely three years later. DoCoMo owns 59% of the Japanese market, but hasn't been able to replicate that success, at least yet, in other markets. DoCoMo's difficulties, at least to date, in morphing its success outside of Japan leaves the way open for other companies to claim market share.

Instant messaging is likely to be a big winner. SMS is enormously popular in Europe, where one-third of the population regularly "indulges." DoCoMo's 3G video service is growing slowly, but at 100,000 subscribers signed up in five months, willing to pay an average $70 per month, it holds great promise.


If you're thinking of getting into the race, keeping a few key words in mind will greatly increase your chances for success. The words, familiar to anyone working in any new technology, include interoperability, functionality, scalability, accessibility, complexity, simplicity, and affordability.

Despite the "giants" already claiming market ownership, and the start-ups that are showing early successes, chances are good that the ultimate dominant players have yet to be identified. The future winners--a new Steve Jobs or Marc Andreessen or Jerry Yang--will eventually introduce the killer app that makes it all take off.



To boldly go where no one has gone before

In 1940 a six year old boy, named Leonard Keinrock, was reading a Superman comic when he came across an insert on how to build a radio. That set off a lifetime of invention with a career-high marked by the birth of the Internet. In 2002, while Keinrock is busy developing wireless business opportunities, kids downloading cartoons are leading users of Japan's DoCoMo I-mode service.


Look out, Leonard, the competition is right behind you.

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