The "Wireless Web" Finally Reaches Critical Mass A few years ago, people could only dream about the freedom to log onto the Internet without using a wire plugged into a telephone jack. Today, its become routine to connect to the Internet wirelessly, at 100 times the speed of a dialup connection, while at a fast-food restaurant or a train station.
And its becoming a big business: Sales of Wi-Fi hardware that enables high-speed, wireless access to the Internet will increase from $1.5 billion in 2003 to $2.9 billion by 2007, according to market consultancy Infonetics.
Where is the wireless Web trend taking us, and our businesses? At this point, its pure speculation, but that hasnt discouraged experts from making educated guesses.
For example, by 2009, wireless consultancy Farpoint Group estimates that half of all homes with an Internet connection will use Wi-Fi technology, up from 12 percent today. Farpoint also predicts half of corporate offices will install Wi-Fi, compared to just 8 percent at the end of 2003.
That would represent a dramatic change in the way people use the Web, but its just the beginning. Its likely that the enhancements to the original technology will quickly surpass the current version of Wi-Fi. This is in line with the pattern that typically plays out whenever a breakthrough technology is introduced: The next generation makes the first generation obsolete.
Currently, startup firms as well as established businesses like Motorola are working on new wireless technologies that will allow people to access the Web.
Whether the standard will be 802.11 Wi-Fi or some new technology, the benefits are enormous, and they can boost the economy. The wireless Web can improve companies productivity by letting them monitor data they could never collect in the past, and by bringing information to places where workers need it the most.
For example, J.C. Penney employees use Wi-Fi to check inventory in the warehouse and prices on the shelves. Other uses for Wi-Fi include construction sites, rescue services, and health care.
What we can learn from the success of Wi-Fi is the blueprint for the development of any winning new technology. In the case of Wi-Fi, several firms cooperated to establish a standard for the technology. Because the same technology was being developed by several companies, the high volumes lowered the cost of Wi-Fi hardware. These low costs erased a traditional obstacle for widespread adoption, which is the initial high price of early versions of any new technology.
In other words, affordable prices of Wi-Fi devices increased demand, and this demand led to higher volumes. And prices keep falling. For instance, Intel has lowered the price it charges PC makers for Wi-Fi chips, from $45 in 2003 to $20 today.3
As prices drop and demand grows, Wi-Fi is becoming a crucial component of PCs. How popular is this feature? About 54 million laptops, PDAs, and other devices with Wi-Fi will be sold this year, according to research firm In-Stat/MDR. That represents a 400 percent increase since 2002.
However, businesses have been slow to embrace Wi-Fi for two reasons: security and cost. CIOs fear the risk that comes with any new technology that makes the company’s network vulnerable to hackers and other criminals on the Internet. Also, concerns about the economy and cutbacks in tech spending have kept many corporations from making a commitment to Wi-Fi. Only about one in 10 large companies is using Wi-Fi networks, according to MetaGroup, a technology consulting firm.
However, that’s changing. When Goldman Sachs surveyed corporate CIOs recently, they ranked Wi-Fi as one of their top three priorities for technology purchases.4
At the same time, consumers are waiting for the technology to catch up to the potential. As Business Week5 explained in a Special Report called “Wi-Fi’s Growing Pains,” “The new generation of Wi-Fi devices that are supposed to make it possible to stream video stored on a PC in the den to the plasma TV in the living room remain more bleeding edge than leading edge. Installation can be a hassle, and sifting through thousands of songs on your PC via remote control in another room is painful.”
So the benefits are real. The technology is reaching the tipping point in penetrating the mass market. But modem wires won’t go the way of buggy whips until more progress is made on a few key fronts.
We’ve discussed much of this in prior issues of Trends. The big news is that the 802.11 Wi-Fi technology we’ve been discussing is at this very moment being eclipsed by a whole range of newer complementary and substitute technologies. And, it’s happening so quickly and so quietly that most executives are oblivious to the implications.
The fact is that Wi-Fi is just the first step in achieving the vision of a wireless Web. Four equally innovative technologies ? WiMAX, Mobile-Fi, ZigBee, and Ultrawideband, or UWB ? will bring wireless networking into every area of life, from cars and homes to office buildings and factories.
These technologies have attracted $4.5 billion in venture investments over the past five years, according to estimates from San Francisco-based investment bank Rutberg & Co.6 Products based on them will start hitting the market this year and become widely available in 2005.
Before long, they will allow people to access the Internet anywhere, anytime. “Now you have a toolbox full of wireless tools that can help with each problem, whether it’s reaching a couple of inches or a couple of miles,” says Ian McPherson, president of Wireless Data Research Group, a market research firm in San Mateo, California.
These technologies will bring us to a new era for the wireless Web, according to Business Week. They’ll link with each other and with traditional wired telephone networks to let people and machines communicate like never before. In small towns that were once cut off by the lack of high-speed connections to the Internet, people will be able to get on-line as rapidly as a stockbroker in Manhattan.
When you’re driving on the freeway, you’ll be able to check the traffic ahead of you. At home, you’ll be able to download movies from your PC and broadcast them on the screen in your living room, without using wires. Wireless sensors embedded in objects will turn lights on and off in buildings, read gas meters in homes, and monitor levels of toxic chemicals in drinking water.
To begin to understand these technology trends and why they are important, let’s step away from a narrow focus on the desktop or laptop PC in the home, office or local Starbucks, and consider some of the other places and applications where we’re starting to see the wireless Web. For example, Wi-Fi is being incorporated in consumer devices, from the refrigerator to the gaming console to the printer. Since Wi-Fi captures the exact location of anyone who is using a hot spot, a mobile worker who needs a printer can ask the corporate network to find the nearest one to the cafe he or she is in.
In homes, the biggest threat to the dominance of today’s Wi-Fi will come from Ultrawideband, which allows data to be transmitted at a rate of 1 gigabit per second ? nearly 10 times the 100 megabits per second for today’s fastest Wi-Fi connections. Although UWB has a much shorter range ? 30 to 60 feet, vs. 100 to 200 feet for Wi-Fi ? that could be enough for many uses. For instance, UWB could replace the USB cords that now connect computers with peripherals such as a keyboard and printer.
More important, UWB could be used to stream video from a DVD player to a TV or from a PC to the stereo in the next room. The first products based on Motorola’s UWB chips are expected to hit the market by the end of this year.
Outside the home, UWB could help businesses save time by letting people access information anywhere in a building, without having to go to the nearest computer terminal. For example, in a dentist’s office, the staff could call up a patient’s dental records and examine X-rays.
More commercial and consumer applications will follow as a UWB standard is ratified by the Institute of Electrical & Electronics Engineers (IEEE), perhaps in late 2005. Overall, the market is expected to grow from zero today to nearly 6 million UWB nodes embedded in various devices by 2007, according to tech consultancy In-Stat/MDR.
IBM is already ahead of the game, with software for laptops and PDAs that makes it possible to roam between Wi-Fi, satellite, and advanced wireless networks, such as those implemented by Verizon, Cingular, and SBC. Cingular already has software that automatically switches Web access from one network to another, and in the future may also automatically select the cheapest and most efficient network for particular applications, such as video. Another software program will consolidate charges for these different networks onto one bill.
The next step will be to build Wi-Fi capability into cell phones, which should make it possible to use Wi-Fi to make phone calls over the Web. SBC, for example, will introduce an integrated way to use Wi-Fi with an advanced wireless network it calls GPRSEdge. Subscribers will be able to buy a package from SBC that includes cellular service and roaming Wi-Fi capability.
Customers will receive cellular service nearly everywhere, with speeds of 100 to 200 kilobits per second; and Wi-Fi, with speeds of 2 megabits per second, will be in homes, offices, and some public locations. SBC is working on seamless transfer, so the move from Wi-Fi to cellular is automated, and the customer doesn’t have to do anything. You’ll simply have an icon pop up that tells you that you’ve moved out of a hot spot and are now on a cellular network. SBC’s hope is that this will be available by year-end 2004. As part of a broader strategy, SBC will also play in the public hotspots market and plans to have 20,000 hot spots built in 6,000 venues by 2006.
Service providers could also adopt a wireless technology called WiMAX ? or 802.16 ?which is expected to be pushed by companies such as Intel starting this year. WiMAX is similar to Wi-Fi. Both create “hot spots,” or areas around a central antenna in which people can wirelessly share information or tap the Net with a properly equipped laptop. But while Wi-Fi can only cover several hundred feet, WiMAX has a range of 25 to 30 miles. That means it can be used as an alternative to traditional broadband technologies, which use telephone and cable pipes.7
With voice-over-Internet hardware, some of this bandwidth can be used to carry standard telephone calls. With a WiMAX antenna attached to an office building, you can create a communications link that can replace traditional telephone and Internet connections.
A company called TowerStream has rolled out a preliminary version of WiMAX technology to hundreds of customers. TowerStream can deliver a 1.5 megabit-per-second Internet “pipe” for $500 a month, compared to $370 for a 1.5-megabit connection from Verizon. But in New York and Chicago, TowerStream offers 5 megabits for $500 and will soon introduce this higher-speed service to Boston at the same price.
Because it’s a wireless technology, TowerStream can hook up its customers in hours rather than days. Today’s preliminary WiMAX equipment has a line-of-sight range of about 10 miles. But unlike earlier broadband wireless systems, WiMAX can work even when the antennas aren’t directly facing each other. However, this reduces the range to about 2 miles.
Some industry-watchers see a WiMAX boom ahead. Visant Strategies Inc., a market research firm in Kings Park, N.Y., predicts a $1 billion market in WiMAX equipment by 2008. But for now, nearly all that growth will come from business customers. The technology still isn’t ready for consumers. Pricing is too expensive for that right now.
After its success with Wi-Fi, Intel is trying to accomplish the same trick with WiMAX. When they hit the market at the end of this year, WiMAX modems will likely cost around $450 each, estimates researcher ABI Research. That’s much more than the cost of a broadband modem or 3G phone card, which are $50 and $200, respectively. But WiMAX is expected to hit speeds of 5 to 10 megabits per second, trumping 3G’s 300 to 500 kilobits per second and the 3 megabits per second that traditional broadband delivers. Intel, Siemens, Alcatel, and Motorola, which all recently announced they would make WiMAX gear, are betting they can spur demand and quickly drive down modem prices. Intel plans to have embedded WiMAX chips in laptops by 2006.
Besides these technologies, which could become industry standards, many new proprietary ones may surface this year. Wheels of Zeus, a privately held, Los Gatos, California company started by Steve Wozniak, co-founder of computer maker Apple, hopes to soon release a product called wOzNet. Expected to be resold by Motorola, this specialized hardware will offer more than just Wi-Fi, says Gina Clark, vice-president for marketing and business development at wOz. It will also incorporate global positioning system capabilities, so people can track where their children, elderly relatives, or pets may be.
Another emerging technology called ZigBee, is the technology that coordinates communication among thousands of tiny sensors. These sensors can be scattered throughout offices, farms, or factories, picking up bits of information about temperature, chemicals, water, or even motion. They’re designed to use little energy because they’ll be left in place for five to 10 years and their batteries need to last. So they communicate very efficiently, passing data over radio
waves from one to the other. At the end of the line, the data can be dropped into a computer for analysis or picked up by another wireless technology like WiMAX. Products based on ZigBee, which has been nurtured by Philips and Motorola, are expected to reach the market later this year.
ZigBee and the underlying 802.15.4 communications technology could form the basis of future wireless sensors, offering data reliability, long battery life, lower system costs, and good range through flexible networking. IEEE says 802.15.4 is ready for release, and the ZigBee network, security, and profile specifications are scheduled to be released later in the year. The first products are expected in the first half of 2004. ZigBee membership is open to all.
Many experts believe ZigBee is the most likely candidate for supplanting the finally emerging Bluetooth standard. For example, the transition from sleep mode to data-transfer mode is faster in ZigBee-based systems than in those that use Bluetooth. From a scalability standpoint, ZigBee networks can support at least 65,534 devices per network, compared with the eight in Bluetooth networks.
The maximum data rate for ZigBee technology is 250 Kbps compared with 1 Mbps for Bluetooth. The range for ZigBee products is expected to be 30 meters in a typical home, compared with 10 meters for Bluetooth products without a power amplifier. As this overview indicates, it’s not too late to start figuring out how and when Wi-Fi and related technology will impact your business, but the clock is ticking. It’s impossible to predict the impact of the wireless Web for every type of business, but in general, you can expect the following developments:
First, in a few years, special software that has already been developed will allow for something called “mesh networking.” With mesh networking, instead of going directly from a PC to the stereo, a downloaded song would be transmitted from the PC to the Wi-Fi-enabled TV to the fridge and then to the stereo ? dodging interference from walls and increasing the speed of the transmission. This could happen at 100 to 200 megabits per second when a new Wi-Fi standard called 802.11n is ratified by the IEEE, probably by late next year. Such speeds ? roughly 100 times that of current Wi-Fi ? could lead to new applications, such as relaying video from a PC wirelessly to a flatscreen TV on the wall. The first TVs using the new standard should come out in 2006.
Second, Wi-Fi will also enable new consumer services. For instance, instead of turning in a camera’s memory stick to have photos developed, customers could simply beam the photos from a Wi-Fi-enabled digital camera onto a store’s equipment. For businesses, enabling such extra convenience might cost as little as $200.
References List :
1. Business Week Online, February 18, 2004, "Wi-Fis Growing Pains: Then Theres UWB, WiMAX, wOz.Net…," by Olga Kharif. ⓒ Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved. 2. Business Week Online, February 18, 2004, "Wi-Fis Growing Pains: How the Wi-Fi Future Might Look," by Olga Kharif. ⓒ Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved. 3. Business Week, April 26, 2004, "Wireless Wonders: No Wires, No Rules," by Heather Green. ⓒ Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved. 4. Business Week Online, February 18, 2004, "Wi-Fis Growing Pains: Before Wi-Fi Can Go Mainstream," by Alex Salkever. ⓒ Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved. 5. ibid. 6. Business Week, April 26, 2004, "Wireless Wonders: No Wires, No Rules," by Heather Green. ⓒ Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved. 7. ibid.
