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News
Issue #2003 - 13 (April 2003)
(Updated Apr. 16, 2003)

INFRASTRUCTURE, PRODUCTS & SERVICES

WiFi News This Week

1. Kinko's inks Wi-Fi deal with T-Mobile
Kinko's on Friday said it inked a deal with T-Mobile to offer the carrier's 802.11-based hot spot service in the retail photocopier's locations. The deal is the latest hot spot announcement from T-Mobile, which currently operates hot spots in Starbucks coffee shops across the world. The company also recently rolled out Wi-Fi service in Borders bookstores. T-Mobile's service, which it calls HotSpot, offers Wi-Fi access plans ranging from a 10-cent-a-minute pay as you go plan to a $29.99 unlimited national plan with a one-year commitment. T-Mobile said its average users spend about 45 minutes online.

2. Boingo, Intel promote 802.11 services to travelers
Boingo Wireless has announced that it had agreed with Intel on a joint marketing campaign to promote wireless Internet access services to business travelers. The marketing campaign dove-tails the recent introduction of Intel Centrino mobile technology for notebook PCs. More than 27 million business travelers carry laptop computers, and these are increasingly 802.11-enabled. Boingo and Intel will work together to increase awareness of 802.11 hot spots. The two companies are testing the Boingo network with Intel Centrino mobile technology to ensure compatibility. Intel developed the Wireless Verification Program, which includes engineering and testing of Intel Centrino mobile technology with various WLAN access point devices, software combinations, hot spot locations, and wireless service providers.
Boingo's network now includes more than 1,200 airports, hotels, cafes, and other hot spot around the world. Boingo claims to have hot spots hotels in 100 percent of the top 20 U.S. metropolitan markets, 86 percent of the top 50 U.S. markets, and 67 percent of the top 75 U.S. markets.

3. Borders offers T-Mobile hot spots
T-Mobile hot spot drive keeps pace with Boingo's, with the company announcing that it will provide Starbucks-quality hot spot service in Borders Books & Music stores. The hot spot service is now available in every Borders store in California, Florida, Georgia, Michigan, New Jersey, Texas, and Washington, for a total of 145 locations. Other states with some Borders hot spots include Pennsylvania, Massachusetts, Illinois, and New York. Borders will make the majority of its 410 U.S. stores 802.11-enabled by mid-June. The service covers the coffee shops (or coffee corners) available in many Borders stores, and also extends to the book shelves and sitting areas in other parts of the store. T-Mobile recently dropped the price of its hot spot services to $29.99 a month with a one year subscription, or $39.99 a month with no commitment. The non-subscription price is $.10 a minute, with a one hour (or $6) minimum. Recent reports suggested that few people pick up the subscription option - of the 22 million Starbucks visitors a year, there are only a few tens of thousands of paying customers (not much when you realize that T-Mobile installed a T1 line in all its hot spot locations, which may cost about $1,000 a month per location). 

4. ABI: WLAN will generate $1.67B in 2003
The WLAN industry is experiencing an impressive growth, helped by lower prices and standardization of technology. Allied Business Intelligence (ABI) believes that this growth will continue to accelerate, as larger technology and telecommunications companies enter the WLAN industry, bringing considerable financial resources and millions of existing customers. ABI's research has determined that the overall WLAN industry will generate $1.67 billion in total revenue through the end of 2003. With the strong global demand for WLAN solutions also comes demand for chipsets, which, according to ABI, are set to hit 23 to 25 million units this year, up from 7.9 million in 2001. Taking into account rapid price declines of integrated circuits (ICs), a growing confidence in new addressable markets, and the strong interest in 802.11 technology, ABI's forecasts indicate that between 2002 and 2007, Wi-Fi chipset shipments are set to grow at a CAGR of 43 percent. By 2007, shipments will reach 147.5 million chipsets, with revenues of $1.13 billion.

The report, "Wi-Fi Networking Equipment: Worldwide Deployments, Drivers, Players and Forecasts for 802.11x," examines the deployments of WLAN equipment worldwide and provides a realistic outlook on where the industry is headed. The report also covers protocol and standards development, the opportunities and challenges for equipment vendors, and the challenges to deploying WLAN worldwide.

5.0 Verizon Communications Now Selling Wi-Fi to Small Businesses
Verizon Communications is now selling Wi-Fi network technology to small businesses in target markets in the Northeast and Mid-Atlantic regions of the U.S. Small businesses can purchase a wireless local area network as a stand-alone service or integrate it with network transport services, such as T1, asynchronous transfer mode (ATM) and frame relay services. Verizon will design and install the customer's network and provide technical support. The company is offering 802.11b, and 802.11a technology and plans to offer 802.11g products next month.

6. Is Wi-Fi Price Right?
In February 2003, T-Mobile announced that it would reduce the cost of using Wi-Fi service in Starbucks coffee shops because of disappointing consumer response. ForceNine Consulting has recently conducted a detailed consumer study that indicates T-Mobile is on the right track. Its research indicates that, while interest in public Wi-Fi hotspots is very high, pricing above an effective rate of $2 per hour will choke off any emerging demand. The survey shows that early adopters are willing to pay $25 per month for unlimited Wi-Fi usage based on desired usage patterns.

With the reduction of monthly pricing to $30 per month (with a 12 month commitment), and assuming desired usage patterns as reported in our research, T-Mobile is now within consumers' desired price range. However, most "per use" or "per session" price plans for Wi-Fi use are well above optimal levels according to these consumers, and most monthly contracts are still above these levels as well. 

Source - Several, including ForceNine Consulting, TechWeb, 802.11 planet and Fierce 80211.

MobileInfo Comments and Advisory: Most of the Wi-Fi news confirms increasing emergence of hotspots in those establishments where professionals go for coffee breaks - Starbucks, Macdonald, hotels, airports and now Kinko. While coffee and printing may not go together, it does make it convenient to pull documents from your notebooks to the high-speed print presses at Kinko. However, most noteworthy commentary is from ForceNine Consulting. We concur with its conclusion - current prices of hot spot services are high. Keep prices high and only a few will use the service. Keep prices low and many will use it. Any technology that is cheap and easy to install (which Wi-Fi is), will attract competition. Is that hard to understand? We think hot spot prices will fall like those of Internet cafes of yesterday. 

 Note: This news release may contain forward-looking statements within the meaning of section 27A of the Securities Act of 1933 and section 21E of Securities Exchange act of 1934 in USA. Similar provisions exist in other countries. There is no assurance that the stipulated plans of vendors will be implemented. MobileInfo does not warrant the authenticity of the information. Readers should take appropriate caution in developing plans utilizing these products, services and technology architectures.  All trademarks used in this summary are the property of their respective owners.


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