This week, MobileInfo.Com would like to summarize various
noteworthy events and trends in this space during the past one year.
In this effort, we cleaned our crystal glass and we are sharing with
you what we saw. Superstitions apart, we base these observations - not
on a self-satisfying survey that most research organizations employ
but more on our observations of product announcements, trials and
tribulations faced by the enterprise professionals and our consultants’
insight into what is real and what is vaporware and finally an acid
test to determine whether the environment exists for technology
adoption. Therefore, we let the traditional trade press have its say
and digest what the trade press says. We hope to have the last word.
We started 2001 with a major hope that this will be the year of
wireless. While dot-com industry
started noticing a sudden degradation in mid 2000, wireless and mobile
industry had to wait for another nine months before it felt the full
brunt of this decline. At the end of 2001, there was a general agreement among serious industry analysts and
consultant community that wireless and mobile computing had joined the
rest of the economy in its downward spiral. The intensity of this degradation varied from
one segment to another. The worst impact was in the wireless
infrastructure sector of the telecom industry that provides the
critical portion of the access highway for these applications.
Credibility of the network vendors, external market forecasters and analysts was toasted on
fire and it evaporated as steam vapor in many cases. We must confess
that even relatively cautious Internet publication like MobileInfo did
not predict the level of change that actually took place. Neither did
we forecast the domino effect of e-business failures on wireless
business, nor did we imagine possible repercussions of September 11. Let us
highlight these changes sector by sector.
Notwithstanding these short-term changes, we saw continuous
evolvement, refinement and maturization of wireless and mobile market
and supporting technologies even in an uncertain economic environment
of the last year. We would like to summarize fundamental themes of
Fundamental Themes of Wireless and Mobile Computing
- To us at MobileInfo, fundamentals of wireless and mobile computing
remain strong with a fairly valid business case for implementing
enterprise applications and need for ongoing development in a number
of product and service categories. All forecasts – short-term,
medium term and long term are bright. Short-term (six to 24 months)
is bright because we have bottomed out. Medium-term (2 to 4 years)
outlook is better because there will be a lot of deployment from
projects that were being planned but have been deferred. Finally,
long-term outlook (five to seven years) is bright because our
industry will make fundamental and structural changes that take
longer to implement across all businesses and industry sectors. Difference between our
forecasts and that of aggressive market research firms is that we
recognize the pace of technology adoption and the surrounding environment.
They ask the question "Would you like to use wireless
Internet?". We ask "Does wireless Internet give you enough
value and can you afford to juggle your spending priorities to start
using wireless Internet?"
- History tells us that Rome was not built in a day. We say that no emerging
technology, howsoever enticing, can become mainstream in a year or
two. Wireless and mobile computing are sharp step technologies that
change our old habits and business processes. Therefore,
wireless/mobile technologies will take longer than incremental
technologies. If economic environment is not supportive, it will
take even longer. Developers and startups with a feint heart should
stay away. Others should dig in and keep their course.
- Developing end-to-end wireless applications is a complex endeavor.
It is not just about 3G networks, 802.11b wireless LANs, WAP,
I-Mode, smart phones, handheld devices, wireless e-mail, stock
trading and location-based applications that this industry is all
about. It is ultimately systems integration of these components into
reliable, affordable and manageable solutions and applications.
- The mobile solution developers and implementers continued to be
inundated by a lot of PR from network folks. There is a gap between
what we hear and what we see.
- As far as mobile consumer applications on smart phones are
concerned, adoption is governed by generation gaps. There is a new
generation that takes control every twenty-five years. Assuming that
the majority of adopters is in the 12 to 25 age group, significant
shift in our habits will take a period of 12 years.
- While we are moving towards mobile computing standards, there are
still a lot of gaps in standards. Based on what we see (and not
hear), serious adoption of even those standards (defacto or dejure)
that are already on the table is somewhat lukewarm. .
- Convergence is taking place in every sector – devices, networks
and service provider organizations.
- First half of 2002 will witness continuous caution in capital
spending in the wireless/mobile arena. Enterprises will tighten
their belts and try to do more with less. Second half of 2002 will
see upward movement in demand and increased spending.
Wide Area Wireless Network Infrastructure Scene
This sector witnessed, by far, maximum changes during the past
year. If we measure news coverage index, 3G stories overshadowed other
stories. Reluctantly, 3G proponents were forced to acknowledge the
realities of economic and technical challenges in upgrading to 3G
technologies in a short time. The hype of 3G was replaced by more
realistic plans based on 2.5G GSM/GPRS and 1XRTT implementation by
network providers. Asian countries - Japan and Korea, snatched
wireless leadership and moved forward with pilot 3G deployments. TDMA
network technology was edged out by GSM/GPRS.
CDMA lost some of its shine in spite of superior technology and
greater spectrum efficiency. GSM/GPRS gained much more credibility.
The result was that CDMA and a smattering of GSM in North America gave way to
predominantly GSM/GPRS and a smattering of CDMA here and there. In
Europe, GSM/GPRS was the default route towards 3G. A few 1XRTT CDMA
networks were installed there as well.
These events of 2001 are precursors to network trends for 2002.
During this year and a part of 2003, we see a continuous but phased
migration from 2G to 3G via 2.5G and 1xRTT (not true 3G technology but
shall we say, -3G). The network vendors will benefit from faster speed
and increased capacity. We expect that wireless data prices will come
down by 50% at least during 2002 when these networks get implemented,
even though speed and capacity at the network level may increase by a
factor of 3-5 initially and by a factor of 10 in the second phase.
Network providers would prefer to price their offerings on a
transaction basis rather than raw megabyte data transfer basis. Large
enterprises will be able to negotiate much better wireless data deals
with network carriers.
Trend towards physical or logical network infrastructure sharing
across competing service providers and roaming across different
networks will continue as providers try to compete downstream (at the
customer level), rather than upstream (at the network infrastructure
What Does it Mean to Enterprise IT Professionals Developing
You can expect faster wireless network speeds with reasonably
national coverage and can plan to implement wireless applications with
40-50 Kbps speeds. This is a respectable speed for most enterprise
applications (be it wireless e-mail, field service, wireless CRM or
consumer stock-trading. Do not start designing multi-media wireless
applications for the enterprise unless you have a strong business case
for these applications or if you are an independent application
developer being financed by the carrier. Keep your network air-link
software support isolated from the business application logic or use a
communications middleware or a gateway that is not tied to current
generation of network only. The importance of this issue become quite
apparent as you read about 802.11b versus 3G debate.
2.5G and 3G Handsets
Number of handsets sold reached its peak in 2000 and declined
during 2001. There may be a slight increase in 2002. Unfortunately for
manufacturers, handset business is highly competitive with decreasing
margins. As a result, Ericsson joined hands with Sony and Motorola
started licensing its design to other manufacturers. This way, they
can protect their IP and realize reasonable profit on it. We see more
movement of manufacturing to Asia.
2.5G GPRS and 3G handsets are still in short supply. We expect that
this problem will be resolved during the second half of 2002.
Disposable cellular phones will become more widespread and will
replace cellular cards.
MVNOs (Mobile Virtual Network Operator)
Red Herring (a VC magazine and research service) predicts that 2002
is the year for wireless business in the form of MVNOs). It says that
by using powerful brands and customer service satisfaction, MVNOs will
compete against wireless carriers. The industry will split with some
operators becoming MVNOs and some selling services directly from their
networks. Carriers that are slow to adapt will miss this trend.
MobileInfo agrees with the trend except the its timing. We see some
negotiations and announcements but very little delivery.
Japan and Europe will continue to lead North America in terms of
cellular penetration. While in Europe, cellular phone is gradually
becoming the primary phone, this will not happen in North America
during 2002. We shall continue to rely on our reliable and almost
ubiquitous fixed line phones for as our primary phone.
Roaming across different carriers in Europe will become more
widespread. North America will see the beginning of roaming in late
2002. Consumer wireless Internet applications will be more prevalent
in Europe and Asia than in North America. We expect a lag of 12-18
months between the two markets.
Wireless LANs Enhancing 3G Wireless WANs
There has been a lot of debate and discussion (including our
editorial) during 2001about 802.11b, 802.11a and future 802.11.x
technologies wiping 3G networks. We do not support the use of the word
versus. It is not a question of 802.11b versus 3G. We strongly support
the words 802.11x networks enhancing 3G networks by creating hybrid
networks. We are pretty confident that wireless LAN implementation in
enterprises and hot spots will continue, in spite of disappearance of
Mobile Star. We expect serious realization by network service
providers first and then by infrastructure manufacturers (Ericsson,
Nokia, Lucent, Nortel and Motorola) that wireless LANs must form an
integral part of this hybrid architecture. Adoption of wireless LANs
in the SOHO market will continue at a fast clip.
Bluetooth Coexisting with 802.11
We expect "Bluetooth versus 802.11" debate to die and be
replaced by how two technologies can co-exist. The two technologies
will find their respective places in the scheme of things. Bluetooth
will become preferred and more affordable method of short-distance
connectivity between handheld devices and peripherals as also with
drive-in kiosks, wireless ATMs and similar application-specific
servers. High-end smart phones in second half of 2002 will be equipped
with Bluetooth chips. You will see this in the second half of 2002.
WAP & I-Mode
During 1999 and 2000, there was a tremendous hype built around WAP
as the pre-eminent protocol for delivering wireless data on various
mobile devices, especially smart phones. Phone.Com was the darling of
the industry and its merger with Software.com in November 2000 to
create Openwave was heralded as a great event. But weaknesses of WAP
started appearing rapidly and a strong gap emerged between WAP’s
promises and delivery. Success of competing wireless application
delivery mechanisms like I-Mode made the future of WAP uncertain
By the end of 2001, WAP had given up its leadership role. Instead,
it assumed its natural place as one of the several competing standards
that will continue to change and grow. We think that WAP has some more
life left in it before it is replaced by its own variation, I-Mode or
most likely yet another converged protocol that combines the best of
what has been incorporated in existing implementations.
SMS and Wireless Instant Messaging
SMS has moved very fast in Europe with only a small traction in
North America. We think that inter-carrier agreements to support
universal SMS (versus within a single network service provider) in
North America will spur this in the second half of 2002. This
agreement has already happened in Canada – it should happen in USA
later in the year. This will put paging in a gradual slowdown mode and
lead to its eventual death in two years.
As far as wireless instant messaging is concerned, 2002 will see a
lot of action with AOL and others offering an affordable service.
Handheld Devices, Smart Phones, Communicators and Consumer
We saw a lot of new devices, especially smart phones with strong
wireless data capability and with slightly bigger and higher
resolution screens than before. Some PDAs got voice capability.
Handspring’s Treo will have voice; our guess is that Palm will
announce it soon when they have put their house in order. Even RIM’s
Blackberry got voice. Always-on feature as implemented in Blackberry
became a must-have feature in PDAs. Convergence between smart phones
and PDAs moved forward but there was no clear sign that it will solve
the problem of multiple devices.
We see continuing proliferation of wireless devices – more before
we have fewer. Several new device startup ventures like Danger will
introduce a new breed of device that will support instant messaging,
wireless e-mail and entertainment. This will make device selection
more difficult. Since we are always trying to simplify device
selection process, we categorize hybrid devices in the following
- Voice Heavy, Data Light – In this category, we include smart
phones with some PDA functionality for business professionals and
simple business applications
- Voice Light, Data Heavy – Here we include, PDAs like
Handspring with phone module. New Blackberry could fall in this
category as well.
- Voice Light and Entertainment Light – Primarily voice-heavy
but with limited entertainment applications.
- Wireless-enabled PDAs – Pocket PC devices with heavy emphasis
on enterprise data applications
- Application-specific devices like those from Symbol
Data entry will continue to be problematic in most cases.
Integrated keyboard as implemented in Handspring Treo’s and
Blackberry will be copied by more devices, we think. While we would
like to believe that speech recognition will come one day, it won’t
become mainstream in 2002. While pick and choose method of data entry
is a reasonable alternative, there are form-based applications that do
require a lot of information to be entered. For these applications,
keyboard will continue to be a required feature.
You should expect incremental improvements in devices with better
resolution displays and barcode-reading functionality embedded in
smart phones and PDAs.
As far as device operating systems (PalmOS, Pocket PC, Symbian) are
concerned, we do not see any standardization or rationalization during
2002. Multiple platform support and device data transformation
functionality in application servers will continue to be challenges
for application designers.
PalmOS will continue to lose ground to Pocket PC for serious
enterprise applications. Palm has to transform its products and
organization quite a bit more to make a dent in the enterprise for
applications other than PIM, corporate e-mail and low data entry
enterprise applications. Recent organizational changes like separation
of solutions and Platform groups, as also the acquisition of
ThinAirApps by Palm will not do the trick. Completely.
Consumers should stop hoping for finding the ultimate single
device. They should select their favorite device on the basis of
matching their task with device capabilities and accept a compromise.
Life is full of tradeoffs, we say.
Selection of the right development platform continues to be a
daunting task. Devices OS, software development kit (SDK’s) for the
handheld device, communications gateway, middleware, application
server, transaction processing, payment processor for m-commerce
applications and integration into legacy ERP applications require
careful analysis. We have seen more choices, more confusion, more
incompatibilities and increased lack of understanding for the
end-to-end application integration. However, this proliferation of
application development tools will see some consolidation. More tool
developers want to work to introduce mobile device specific and
wireless-specific support in application servers like IBM’s
WebSphere, Oracle 9i and BEA’s WebLogic. In fact, enterprise
professionals should use this as a cue to select development tools. We
see Sybase’s iAnywhere platform well positioned to provide support
in this area.
In terms of applications and applets running on handheld devices,
Java’s J2ME became a preferred platform for development, over and
above a number of other development platforms, including Microsoft’s
Windows CE component of .NET. It garnered extensive developer support
and is intrinsically a better choice for diverse hardware and software
environments that exist in handheld arena. This trend will continue.
Microsoft’s .NET initiative will gradually get more flesh, improve
and become a serious option for Microsoft-centric environment.
Mobile and Wireless Applications – Enterprise versus Consumer
Earlier in the year during 2001, there was much hype and hope for
adoption of mobile applications like consumer e-mail, consumer
m-commerce and SMS-based messaging, especially in Europe. This did not
happen. We do not expect these applications to take off in 2002
either. Instead, it is the enterprise market where real business value
and opportunity exists – both horizontal and vertical applications.
Over the long haul, consumer market will be quite big but only a few
large carriers will reap the seeds of this market. That would not
happen in 2002.
Horizontal applications did gain more acceptance and adoption.
Wireless email continues to be much sought-after application in the
enterprise sector. But cost considerations will force enterprise IT managers
to offer it to their
employees on a very selective basis – executives first, sales and
service staff second. Field service automation, Wireless CRM,
Telematics will see more action in 2002. M-commerce will generate
negligible revenue for most carriers. May we remind the carrier
business development executives that 2002 is investment time for
location-specific m-commerce applications?
Wireless e-mail, instant messaging and groupware applications
assumed greater importance. Enterprises started investigating how they
should offer e-mail to their mobile professionals in the field. There
were a number of product developments in this area with most e-mail
engines trying to support most popular device platforms like PalmOS,
Blackberry, smartphones and Pocket PC. Both Lotus Notes and
Microsoft Exchange became more mobile than before gaining wireless
network support. Microsoft became more serious and announced groupware
Mobile Information Server. By promising superior technical and
functional integration with Exchange, Microsoft hopes to fortify
its position in 2002. Earlier, Microsoft had depended on
Wireless Knowledge (where Microsoft had significant equity investment)
to safeguard its market interests in this area. Market watchers saw
conflict in this strategy and divided loyalties. This led to Microsoft
divesting its equity investment in Wireless Knowledge to Qualcomm.
MobileInfo believes that a groupware server should support all
popular backend messaging platforms, MS Exchange and IBM's Lotus Notes
being the two leading products in this area. This is what Wireless
Knowledge was and is trying to do. While we like Wireless Knowledge
becoming independent from Microsoft, we are not enthused by Wireless
Knowledge having Qualcomm as its major shareholder. This is not a good situation for
its customers and therefore for Wireless Knowledge who could be under
pressure to support
Qualcomm's CDMA network first. As network scene changes around the
world during 2002, GSM/GPRS network and device support is as important
as CDMA support, as far as wireless data applications are concerned.
CDMA may have more voice footprint in USA today, but this may not be
the case with wireless Internet. This event demonstrates one important
equity partnership risk to us i.e.
an application vendor must not depend on a single network technology
vendor as its shareholder. Applications must support all networks – current networks,
CDMA as well as GSM /GPRS. Enterprises must exert as much pressure as
they can to ensure multiple network, multiple device and multiple
backend support. Seamless interoperability is something wireless
network vendors like Qualcomm must accept and work towards.
Carriers will find it difficult to capitalize on the vertical
applications for the enterprise directly because they require domain
knowledge and application integration expertise which most of them do
not have. They will have to form partnerships with application package
Location-Based m-commerce, Wireless advertising, Gaming and
With e911 mandated in USA spurred by public safety concerns, there
will be an opportunity to develop location-specific applications using
more precise location based on e911. Early-adopters in younger age
group will start experimenting with these applications. Uptake will be
slow and revenues will be nowhere close to the numbers forecast by
well-known research firms.
The industry has started feeling the need for standardization (defacto
and dejure) in this space. But vendor focus has been limited to its
own product component. Some standards did get good following. IEEE
802.11, SyncML, J2ME, GSM and XML are significant efforts but you need
end-to-end mobile architecture standards. Nokia’s recent effort with
a broader "Open Mobile Architecture" standard needs wide
support. While major carriers and systems vendors have agreed to
support it, we would like to see wholehearted and active support of
these standards and products based on these standards to be preferred
offering by these vendors. We do not want lukewarm support.
Understanding the inherent process in standardization and behind-the
scene inter-vendor rivalry means that this will not happen in 2002.
Security concerns among mobile devices will only be amplified as
device capability and data sharing increase
This continued to be the single most serious shortcoming in mobile
devices and wireless networks (both wide area and wide area). As we
rely on these devices for m-commerce and sensitive corporate
applications, need for security becomes paramount. Even though
millions of data-capable mobile devices are currently in use around
the world, attention to mobile-device security has been minimal. This
deficiency became very obvious with September 11 tragedy. A lot of
attention is now being paid to this area. We do expect some of the
shortcomings in wireless LAN security to be plugged during 2002.
Implementation of VPN security in mobile devices will help. In this
process, we would perhaps lose a bit of our privacy because network
providers will know who you are and where you are, especially with
e911 implementation. With September 11, 2001 events still fresh,
consumers will accept this tradeoff.