(March 14, 2001)
Publisher and Managing Editor's
Ericsson, Nortel, Lucent, and many other giants have announced bad news
about lower profits and layoff. They are blaming it on 3G delays by
carriers. Carriers are blaming that consumers are buying only 500 million
units instead of 550 million. However, Nokia stands out with somewhat
optimistic beat - says it will increase its market share. On the other end, IBM says that it is not having
any problem with marketing wireless projects. Palm is spending 360 million
to buy Extended systems at a good premium. Where is the truth about wireless
Is it deja vu
with wireless? Will there be a repeat of many previous forecasts of the last
decade that did
not come true? We fully understand that no industry is immune to economic
cycles. However, PR folks, market research industry which feeds the
former and the marketing VPs for the vendors must take responsibility for
creating unrealistic expectations.
To give you our crystal ball
guess of where we are headed, we shall put forward the following assessment
- as we see it anyway. We shall do do so in a bullet form (like most logical
and our website subscribers think) as compared to long trade journalistic
prose that suits the print media better. We know that you want us to
net it out.
Enterprise IT and
telecommunications professionals must look at mobile computing and
networking from a broader and holistic perspective, not just from the
infrastructure vendor perspective. Sure, there will be a dampening of
the pace at which we have hoping to grow. This will be more evident in
North America and Europe than in Japan and Asia.
As far as profit forecasts
of wireless companies mentioned above are concerned, let us put things
in perspective. Wireless portion of the total revenue generated by
these companies is not huge and is not causing all the heartburn to CFOs at
these companies. Nonetheless, wireless computing is not immune to
economic downturns and this will affect the R&D expenditures on
wireless initiatives at these companies. Real culprit is our
expectations of continuous growth that brokers lead us to believe.
Like gullible people, we eat whatever they offer.
If you are the 3G
infrastructure supplier, you will not meet the projections that your
market research company led you to believe because some of the carriers
are postponing their 3G plans. The carriers were caught in the hype and euphoria
built unrealistic expectations. We have said so all along during last
year. It may be interesting to
read our advisory in various news items during 2000. Please also read
our editorial page of February 28, 2001.
Carl Yankowski of Palm was
right in one respect - you can develop decent mobile applications with existing
networks and do much more with 2.5 GPRS (or similar networks) by building
better applications and funding network bandwidth optimization
techniques. Plan for 3G networks but deploy today @G
Real issue is not wireless
networks, 3G, or handsets, even if you are a vendor in that space.
Real issue is giving consumers and enterprises a more productive
business applications and a more enjoyable gadget at an affordable
price. Price should not be determined by the rate of return that your
CFO has determined using aggressive criteria. You must be in it for the
long haul. Remember that you built the wireless infrastructure for the
long haul. Please mix modern methods with traditional and conservative
If you are a
telecommunications vendor, shed your conventional voice-based
circuit-switched thinking. Think of packet-switching. Think of IP.
Think computers, not telephones. Think of multiple forms of
information, including voice which might be the most important but only
one of the information types.
Please recognize that
building mobile computing business applications is far more complex and
requires a different discipline and mindset than building voice-based
applications because of two simple facts. The first one is that
you do not have an intelligent human being at the other end of the
cellular telephone but a computer program. The second reason is that
number of combinations in which business data needs to be manipulated
and programmed in mobile computing applications is hundred times more
than how voice is handled. Hire and learn from the trials and
tribulations of IT software professionals who have built mobile
applications for the enterprise and high-performance application systems
for the consumers (hundreds of thousands or even millions of users, not
just thousands of them). Combine their wisdom and discipline with your
own reliability and mass customer service outlook.
expectations and manage them as you deliver service. Value of providing
video on wireless has affordable value only for a small groups of users,
not for everybody else. It will
happen but not in two to five years - more like 7-10 years.
Globalize your efforts.
Japan and Europe will move ahead of North America in 3G, and m-commerce
Learn by experimenting over there and then implement a modified strategy
in North America when it settles down.
If you are an application
developer, go ahead with developing applications in the vertical space
after understanding how that industry works. You can develop
applications that work both in on-line and offline modes with batch
synchronization later. As future faster wireless networks come along,
you can introduce more functionality and stay connected in on-line mode.
In your choice of developing core product or service focus, do not be a me-too
vendor or a copy-cat Create a differentiation from the guy next
Recognize psychology of
human beings - how they adopt new ways of doing things. New
Internet-savvy generation is important but they will assume an important
role in due course of time.
Fundamentals of mobile and
wireless computing are still very strong. Many of the forecasts will
happen albeit much later. Do not give up. Just revise and tune your
plans for a different date.
More next week!
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