Mobile Computing Outlook For 2003.
Review of Mobile Computing and Wireless Data Happenings During 2002
and Trends for 2003
It is traditional during the last week of December or the first
week of January to take stock of events during the previous year and
provide an outlook for the next year. We do not claim any super-natural
powers to predict the fortunes of the vendors and call the industry
future. We also do not conduct surveys among IT managers and ask them
what they would like to do with this technology during the coming
year. Instead, we rely on feedback from enterprise professionals
who have to conceptualize, justify, plan, design and develop wireless
solutions that work and produce economic benefits to the
We had claimed, in the past, to be more pragmatic and therefore
more accurate in our
predictions than many of industry surveys commissioned by vendors and conducted by hot-shot researchers
who had never installed, in their entire professional life, a wireless project. However,
experience of the past 18
months has humbled all of us. Forecasting technology trends is a risky
business, especially when there are structural changes in the economy.
But decision-making in deploying emerging technologies becomes riskier
if you ignore technology trends. Trick is to figure out whose advice are
you going to listen to when there are conflicting trends. We suggest
that you should validate the motivation and methodology of researchers before heading
We started 2002 with a major setback from September 11 tragedy and
resultant economic downturn. Most of the industry went through a
reality check in the first half but rebounded in the second half.
During 2002, the hype was completely taken out of 3G as the wireless
infrastructure of future. While in Asia and Japan, 3G did move
forward, in Europe and North America, the interim network strategy
based on 2.5G (GSM/GPRS and 1xRTT) became dominant. More 3G plans were
put on hold or delayed than the ones that went ahead as
scheduled. I-mode and DoCoMo lost its lustre as the envy of the
world. WiFi WLANs became extremely popular, giving real meaning to
hybrid networks (wireless WANs and wireless LANs). Cellular voice
continued to attract more attention from network providers than
wireless data. 2.5G handset sales did not match highs of previous
years. VC community continued to fund new products, especially in the
WiFi arena, WLAN security space, homogenization of network
architectures and Java platform development tools. Let us
highlight these changes sector by sector.
Notwithstanding these short-term changes, we see 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
this industry during 2002 as follows:
Fundamental Themes of Wireless and Mobile Computing
- To us at MobileInfo.Com, fundamentals of wireless and mobile computing
remain strong with a fairly valid business case for implementing
enterprise applications (both horizontal and vertical) and a need for ongoing development
in a number
of product and service categories. To us, all forecasts – short-term,
medium term and long term are bright. In a sense, this is what we
said last year in the context of enterprise focus of wireless data. Short-term
(12 to 24 months) outlook is bright because we have bottomed out.
The worst is over. 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 suggest that hey should ask "Does wireless Internet give you enough
value and can you afford to juggle your spending priorities to start
using wireless data applications - Internet or Intranet during 2003?"
- 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 smooth step incremental
technologies. If economic environment is not supportive, it will
take even longer. Developers and startups with a faint 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, cellular handsets, WiFi wireless LANs,
I-Mode (or its European incarnations), smart phones, handheld PDA devices, wireless e-mail,
wireless content delivered to the consumers or location-based applications
in isolation that this industry is all
about. It is ultimately systems integration of these components into
reliable, affordable and manageable solutions and applications for
the enterprise and consumers.
- 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 to 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 7-8 years.
- While it is not technically very difficult to deliver content to
consumers' handsets but managing this content delivery with required
quality of service, scalability, accurate billing, secure payment
systems and appropriate customer care services to support large a
subscriber base takes time.
- While we are moving towards mobile computing standards, there are
still a lot of gaps in standards. Even in the wireless LAN arena,
there are IEEE 802.11b, IEEE 802.11a, IEEE 802.11g standards vying
for supremacy. 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 necessary in every sector – devices, networks
and service provider organizations. While it has started, this
convergence will take a while to complete. Please remember that till
it is completed, the problem is not becoming simpler - it is
becoming more complex. Therefore, let us not expect VoIP, a single
always-on handheld device, a single network radio, a unified hybrid
network and inexpensive wireless data pipes any time during 2003. We
would need multiple devices, will have to deal with multiple
wireless networks, require session persistency software to maintain
application connection and invest in careful application design in
- It is not service providers' desire but pocket books of consumers
and enterprise IT budgets that will determine the pace of wireless
- 2003 will continue to witness continuous caution in capital
spending in the wireless/mobile arena. Enterprises will try to do more with less.
Wireless data continues to be on the mind of CIOs and we can expect
corporations to allocate money to wireless projects with a strong
business case. Perhaps 2004 will
see significant upward movement in demand and increased spending.
Wide Area Wireless Network Infrastructure Scene
This sector witnessed, by far, maximum changes during the second half
of 2001 and whole of 2002. Public relations firms stopped contesting
the hype behind 3G promotional efforts. 3G proponents acknowledged the
realities of economic challenges in upgrading to 3G infrastructure
according to the original time table. The hype of 3G in the trade
press was replaced by more
realistic assessment and network migration plans based on 2.5G GSM/GPRS and 1xRTT.
Asian countries - Japan and Korea, snatched
wireless leadership from the rest of the world and moved forward with several 3G deployments. We
are not saying that 3G is dead - in fact, we want it to survive and
flourish. However, time table will be more stretched than originally
CDMA had lost some of its shine in 2001 in spite of superior technology and
greater spectrum efficiency. But it regained it during 2002. GSM/GPRS
networks in Europe started off with a bang but did not deliver in
terms of efficiency and speed. CDMA gained in Japan and North America
but made a respectable entry into Europe. CDMA gained in China and
India as well. EDGE networks (2.75G, in our view) may come back into
fashion as a migration strategy because of economics of 3G.
On a positive note, the world subscriber base crossed billion mark
and reached 1.155 billion at the end of 2002. World ARPU continued to decline and at Q3 2002
was hovering above US$ 31. This was largely due to China reaching 200
million subscribers and becoming the largest market in the world,
based purely on numbers but not on ARPU.
These events of 2002 are precursors to network trends for 2003.
During 2003, we see a continuous deployment of 2.5G (GSM/GPRS and 1xRTT),
with a few network providers in Europe and North America moving ahead
with 3G in selected high density areas. Japan and Asia The network vendors will benefit from faster speed
and increased capacity. We expect that carriers will accept in 2003 what
enterprises network professionals have been asking - fixed price
tariffs for a class of users in a given industry. This will take the
fear away from network providers of some users hogging their networks.
Network providers may find it attractive 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.
What Does it Mean to Enterprise IT Professionals Developing
Major carriers around the world (North America, Europe, Japan,
Korea, China, India and in other countries) now offer faster wireless
data networks with reasonably
national coverage. You can now plan to implement wireless applications with
35-40 Kbps (higher for 1xRTT) effective speed. 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. Consider using session-persistency
software - software that maintains application session even you switch
from one network to the other - primarily between WLAN and either
GSM/GPRS or between WiFi WLAN and 1xRTT. Our website provides more
information on this.
2.5G and 3G Handsets - Availability and Features
While the trade press covers this topic extensively, we do not think that
the number of handsets sold during a particular year has much to do
with the growth of wireless data applications for the enterprise. It does
determine the financial bottom line of Motorola, Nokia or
Sony-Ericsson as well as wireless carriers like Sprint, Verizon,
AT&T, Vodafone and others. However, if an industry's business
model and cost structure are so weak that it must have a 10% year to
year growth to stay in the black, we suggest that the executives
should rethink its long-term survival strategy. Unfortunately for
manufacturers, handset business is highly competitive with decreasing
margins. Should the industry blame the consumers if they do not buy
new handsets before the old one is 12 months old. If the industry
knows what features it intends to offer during the next few years,
should the industry not design software or firmware upgradeable
handsets that reduce the cost of acquiring new ones. Technologically,
we think it is do-able. Those vendors who think we do not understand
the difficulties should ask academic and research organizations to
figure it out.
During 2002, industry saw a slight decrease in number of
handsets (around 400 million, more or less) sold. This year, we may expect
a few more million handsets. During 2003, we should see more
camera-equipped, more Bluetooth-enabled and more GPS-equipped
handsets. Recognizing the success of WiFi, high-end handsets for the
mobile professional will get WiFi features built into the base phone.
Cellular handsets will encroach on PDA functional territory more than
the other way around. But the dream of a single converged device will
stay a dream unless you are willing to compromise on voice-centric
capabilities or data-centric functionality. It will be a tradeoff
issue - what is more important to the user. We should also expect more 3G handsets
available during 2003 for those who are lucky to be in the area where
3G networks are available. Disposable cellular phones will also become more widespread and
replace cellular cards.
Japan, Korea and Europe will continue to lead North America in terms of
cellular penetration. Most national carriers will rightfully claim
national (more than 90% of urban areas) coverage of their 2.5G
networks. While in Europe, cellular phone has become the primary phone, this will not happen in North America
during 2003 for the average consumer. For the upward mobile and
younger crowd, yes but not for average consumer. We shall continue to rely on our reliable and almost
ubiquitous fixed line phones as our primary phone.
WiFi and 3G Coexistence Debate Over
To us and most serious observers, the debate that we started
in our editorial in 2001 calling for hybrid networks as the wireless
network architecture of future is over. The enterprise has voted
overwhelmingly in favour of WiFi. In fact, we can endorse analysts
calling 2002 as the year of WiFi. WiFi's success has been phenomenal.
IEEE's standardization work in WiFi arena is worth noting. The VC
community and silicon vendors have come forward with inexpensive
components and finished products. The price-point of WiFi radios and
chips has come down drastically. This is good news. Speeds are going
up with 802.11a and 802.11g. Even FCC in USA has recognized it and may
even allocate more free spectrum for WiFi. We applaud the efforts of
vendors like Intersil, Linksys, D-Link and Intel (for allocating 150
million VC fund) in this space. Hotspots are springing up everywhere.
But we needed big players to consolidate this effort. IBM's recent
announcement in conjunction with AT&T and Intel (Cometa Networks)
has just done that - legitimatized this trend.
We are pretty confident that wireless LAN implementation in
enterprises and hot spots will continue. We predicted in 2001 and are
glad to note that there is now a serious realization by network service
providers and infrastructure manufacturers (Ericsson,
Nokia, Lucent, Nortel and Motorola) that wireless LANs must form an
integral part of future wireless architecture. We expect more serious
involvement of wireless service providers in WiFi during 2003.
WiFi and Security Debate - Rightful but Vested
There was a huge debate over lack of security in wireless networks.
The risks posed by insecure WLANs were well-exposed. This was legitimate and
rightfully placed at unauthorized WLANs that had sprung up in the
enterprise, unknown to the IT infrastructure management personnel who
were caught sleeping while these were getting installed. SOHO
installations could not care less because they could get Internet
access wherever they went inside their offices.
The vendors and standards bodies have
listened to this hue and cry and have moved fast on providing short-term
and long term solutions. More secure user authentication and better
encryption technology got implemented in the latter half of 2002.
We take wireless security issue seriously and advise
all professionals to ensure security of enterprise data as it travels
over the link and from unauthorized access. At the same
time, we suggest to IT security professionals that they should
evaluate the risks with wireless LANs and use available technology
(Bluesocket, Reefedge, Air Defense and others) to address the problem.
We should realize that wireless security is not a monolithic (one
type of security fits all applications and users) issue or a binary (to allow or not allow
WiFi in an organization) issue. You must apply your security policy
but do so selectively and responsibly. Setting up a closed steel
gateway that allows information to fixed line network users only and creating a scare among users
may be misconstrued as being an obstructionist. This is not such a good
IT security policy except in a few selected application areas like public safety.
Your job should be to help users figure out how to secure their WLANs.
Bluetooth Coexisting with WiFi
In our last annual outlook, we predicted "Bluetooth versus
WiFi" debate to die. It almost subsided in 2002. The two technologies have now
found their respective places and roles in the scheme of things. A few
campus LANs, notably PALM in Mountain View, California, are trying
Bluetooth Access Points. This year, we hope to get the score card and
find if these will deliver the results. Bluetooth lobby has not made
the encroachment on WiFi that some feared. Bluetooth has become the preferred and more affordable method of short-distance
connectivity between smart phones and peripherals as also with
drive-in kiosks, wireless ATMs and similar application-specific
servers. High-end smart phones in 2003 will be equipped
with both Bluetooth and WiFi chips. The former will give you
hands-free capability and the latter will let you access e-mail and
corporate information in a
SMS and Wireless Instant Messaging
2002 saw serious introduction of SMS in
North America. Inter-carrier agreements to support
universal SMS (versus within a single network service provider) in
North America did happen. SMS and IM usage will increase further in
2003. IM has become an integral part of e-mail messaging systems like
Exchange and Lotus Notes.
Handheld Devices, Smart Phones, Communicators and Consumer
During 2002, 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 selective voice
capability - not as good as cellular phones but some. Always-on feature as implemented in Blackberry
became a must-have feature in PDAs. RIM won in several intellectual
property cases by signing agreements with Nokia, Handspring and Palm
but lost an important one to NTP. It established its IP in thumb
keyboard but its always-on email capability got contested by
NTP. In the first round, RIM lost.
The big news with PDAs during 2002 was the entry of Dell in this
space with its introduction of two models. This immediately put
pressure on prices of PDAs. Palm's Tungsten and Zire products came out
backed by a heavy advertising campaign but did not score well with the
enterprise. In 2003, we shall find the real score. Toshiba and Sony became aggressive in
their PDA strategy - in Pocket PC and Palm OS camps respectively. Sony
went further by investing in Palm.
Convergence between smart phones
and PDAs moved forward slightly but there was no clear sign that it will solve
the problem of multiple devices in 2003. Consumers should stop hoping for finding the ultimate single
device that does everything well. 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. Business decisions are not immune
We see continuing proliferation of wireless devices – more before
we have fewer. Several new device startup ventures like Danger
introduced a new breed of device that 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 Heavy 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, including Palm. While we would
like to believe that speech recognition will come one day, it won’t
come in 2003. 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 more
powerful devices (processor-wise), better
resolution color 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
2003. Symbian did loose its dominance slightly in smart phone area. Multiple platform support and device data transformation
functionality in application servers will continue to be challenges
for application designers.
Palm OS version 5 was introduced, giving Palm much-needed
functional richness. However, 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. Organizational changes like separation
of solutions and Platform groups, as also the acquisition of
ThinAirApps by Palm during 2001 did help in turning Palm around but
that is not sufficient to overtake Microsoft's Pocket PC 2002
Application Development - Wireless Data
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 consumer 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
During 2001 and first half of 2002, there was much hype and hope for
adoption of mobile applications like consumer
m-commerce, location-based services, wireless advertising, wireless
entertainment and wireless gaming, especially in Europe. The wireless
industry incorrectly forecast huge uptake of these consumer
applications. Their multi-billion dollar investment in consumer
applications as primary source of additional revenue and increased
ARPU was a bet with a high risk and low probability in our estimation.
While reviewing and reporting on these forecasts, we pointed out that
in a weak economy, consumers are less likely to spend their
hard-earned dollars and Euros (some yens, may be) on these
applications. Surprisingly to the service providers but not to us, it
did not happen.
On the whole, we do not expect these applications to take off in
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 2003.
Horizontal applications did gain more acceptance and adoption.
Wireless email continues to be much sought-after application in the
enterprise sector. Carrier wireless data plans on new 2.5G networks
are attractive enough to allow more members of the enterprise to use
messaging to stay in touch. Field service automation, Wireless CRM,
Telematics will see more action in 2003. M-commerce will generate
negligible revenue for most carriers.
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 is trying to do. Its acquisition of Mobilocity in 2002 will
give it the mobile consulting expertise in needs to market to the
enterprise. While we like Wireless Knowledge support multiple messaging
platforms from Microsoft and IBM, we would encourage it to support both
CDMA networks (which it is doing because it is owned by Qualcomm) but also
GSM/GPRS networks that will be around for quite some time. Groupware
applications must support all networks – current 2G networks, 1xRTT CDMA
networks as well as GSM /GPRS. Enterprises must exert as much pressure on
application suppliers as
they can to ensure support for multiple networks, multiple devices and multiple
backends. Seamless interoperability is something that is in the
long-term interest of wireless
network vendors like Qualcomm. Superior wireless groupware application
and spectrally-superior network like CDMA will gain more adoption if it
had GPRS support than if it did not. We invite comments from Wireless
Knowledge again in 2003 as we did in 2002.
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
vendors. We see increased awareness among carriers during 2003. This
will be good both for the carriers and the enterprise.
Now we would like to list top ten trends that may be important for planning your
mobile/wireless initiatives during the next couple of years:
1. On the wide area wireless network side, two standards (three, depending on how
you count) will continue for a while CDMA 1xRTT and GSM-based GPRS (in
some cases GSM-based UMTS/WCDMA). Ensure your devices will support
both i.e. network adapters for both standards are available for the
devices you choose and wireless gateways you select for the enterprise (if
you are an enterprise or an ISP). 3G will be
gradually deployed with 2007 as the target year when true 3G will become mainstream.
2. WiFi Wireless LANs will continue to proliferate. Security
problem are being addressed vigorously and will be solved to the satisfaction of IT security
professionals. Major (we did not say, all) vendors will support IEEE 802.11x standard
(security and class of service). You must ask the selected vendor
to tell you how it intends to upgrade its hardware and software to
meet evolving standards.
3. All large wireless carriers will have to support roaming across WiFi and
their wireless WANs. If your carrier does not support this type of roaming, do not waste your time with
it. Enterprise-grade WiFi access points should (and will) support
all three WiFi standards - 802.11b, 802.11a and 802.g, as also 802.11x and
802.11i for security and QoS.
4. Wireless broadband services will become increasingly attractive
for under-serviced residential and SOHO customers.
5. Network carriers will offer selective fixed price plans per user
for wireless data, based on vertical
6.. Management of mobile assets and wireless networks will become
increasingly important for the enterprise. You may decide to ignore it
during the pilot deployment stage but it will haunt you later. You
must recognize total cost of ownership as you deploy these devices
across the entire enterprise.
7. Messaging (e-mail and instant) will be the most popular
application in the enterprise. Instant messaging will become
integrated with many corporate applications. However, more value
will come to the enterprise from vertical applications. More ERP
applications (SAP, PeopleSoft and others) will have integrated
8. While smart phones with PIM function might become the dominant
converged device. These devices will dominate consumer and SOHO markets.
However, serious mobile professionals will have to rely on
multiple devices or PDA -centric devices with limited voice capability. The enterprise
will likely adopt these devices for vertical applications.
9. There will be general consolidation and rationalization among
vendor ranks in all matured categories. Choose your vendor partner carefully.
10. Wireless application deployment will continue to be among the
top three priorities of CIOs.
- Chander Dhawan,
Managing Editor and Principal Consultant, MobileInfo.Com
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