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Change Is No Small Feat
Questions don't deter investors in wireless Internet
Henry
Norr, Chronicle Staff Writer
Monday, October 23, 2000
©2000
San Francisco Chronicle
URL: http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2000/10/23/BU88120.DTL
From giant telecom carriers to tiny software startups, the high-tech world is betting billions that U.S. consumers will jump at the chance to go online from their mobile phones and pocket organizers.
Industry analysts agree that is bound to happen sooner or later, but many say it won't be until the industry comes up with compelling answers to a slew of unresolved issues.
Some of the problems are technical, and solutions are already on the drawing boards -- it's just a matter of time (and money) until they are implemented.
The trickier challenges, observers say, are those that involve customer preferences: What kinds of on-the- go data services do American consumers actually want? On what kinds of devices? And what price will they pay?
To these questions there are no clear-cut answers, and it could be years before they are worked out.
A MATTER OF TIME
``There's no doubt in my mind that wireless data services will eventually be very, very popular,'' said Peter Rysavy, an industry consultant in Hood River, Ore., ``but for now, that's a matter of faith, not a proven case. And as to the time frame, I'd be somewhat skeptical of a lot of the predictions you hear.''The most obvious problem is bandwidth. The wireless data networks generally available today in the United States limp along at nominal rates of 9.6 to 19.2 kilobits per second, far slower than wired modems.
As a long-term solution, the industry is looking to ``3G'' -- a third generation of wireless equipment, following the original analog cellular networks (1G) and today's digital but slow systems (2G).
But 3G is several years away even in Asia and Europe. Here in the United States, it's even further off, thanks to conflicting technical standards and squabbles over the allocation of frequencies.
In the interim, carriers are counting on a series of more-modest enhancements -- known collectively as 2.5G -- to break the bandwidth bottleneck. Within 18 months, according to analyst Andrew Seybold, two of the largest U.S. wireless carriers, Sprint PCS and Verizon Wireless, plan to deploy a technology known as 1XRTT, which is supposed to boost data bandwidth on their networks to 153 Kbps.
U.S. IN THE VANGUARD
If these plans come true -- never a certainty in the fast-changing world of wireless technology -- the United States will for the first time jump ahead of Europe in wireless data speeds, at least for Sprint and Verizon subscribers.But higher speeds alone don't guarantee popularity for wireless data access. The types of applications most likely to take off among phone users, Rysavy points out, are e-mail and text-based programs that provide specific bits of valuable information, such as flight schedules, stock quotes and sports scores. Applications like those don't require a lot of bandwidth.
Exactly what sort of mobile information services mainstream U.S. consumers really want remains to be seen, though. Europeans have flocked to a feature called Short Messaging Service, which allows users to transmit brief text messages they have tapped out on their phones' keypads. In Japan, similar capabilities have been key to the dramatic growth of a wireless service called I-mode, which has attracted more than 10 million subscribers in its first 18 months.
But it's not certain how such messaging schemes will fare here, in part because PCs with e-mail are much more widely available in the United States.
As for Web access, most of the industry initially rallied around a standard called WAP, or wireless application protocol, which was supposed to make it quick and easy for companies to adapt their current Web sites to serve phones and other small-screen devices.
But critics say these hastily converted applications are clunky, slow and annoying, largely because they require users to navigate through multiple menus. Phones with full support for WAP have yet to arrive in this country, but in Europe, Seybold said, the technology is ``falling on its face because users are discovering that the industry overpromised and under-delivered.''
The problem isn't with WAP per se, Seybold said, just with trying to convert existing services instead of developing new ones from the ground up for wireless users. Japanese developers adopted the latter approach for I-mode.
To most developers, however, creating special applications for wireless users is a lot of extra work for an audience that is, for now, small. Some say the answer is extensible markup language (known as XML), an emerging Web-development language that's supposed to make it easier to serve both wired and wireless users effectively. But it will be years at best before most sites convert to that technology.
Whatever the language, the services most likely to succeed, according to the industry's latest conventional wisdom, will be ``location based'' -- in other words, those that deliver information automatically tailored to the user's exact location, such as driving directions and pointers to nearby entertainment and shopping opportunities.
POTENTIAL PITFALLS
But, here again, no matter how large the opportunity looks, it is yet to be proven in real life. And fears about privacy -- Big Brother and the Baby Bells tracking one's every move -- and spam -- phones cluttered with unsolicited wireless pitches from every fast-food joint one passes -- could slow down real- world adoption.Similar uncertainties surround the future of hardware for wireless data. Traditionally, cell-phone users have gravitated to small phones, but their tiny screens make any data application a challenge. And even on larger phones, entering text on a 12- key pad remains an ordeal, even with new software that tries to simplify the process.
Many in the industry are betting that the answer is some form of hybrid between cell phones and pocket organizers because organizers have larger screens and minikeyboards or handwriting recognition to make text entry easier. Ultimately, though, there may not be a truly satisfactory solution for the input problem until handheld devices support reliable voice recognition -- a capability still years away.
As to pricing, service providers generally like usage-based rates -- where charges depend on the amount of data sent and received -- because they deter customers from ``excessive'' use. That's especially critical to wireless carriers because data traffic occupies bandwidth that could otherwise be available for billable voice calls. According to a recent article in Seybold's Wireless Outlook newsletter, eight data sessions at 144 Kbps take up as much cell capacity as 92 voice calls.
But whatever the economic rationality behind metered pricing, history has shown repeatedly that, as Rysavy put it, ``it's incredibly unpopular with users.'' They prefer unlimited access at a flat -- and cheap -- monthly rate, a prospect that ``scares the heck out of the carriers,'' Rysavy said.
Altogether, wireless data access may well be the Next Big Thing, but the list of uncertainties surrounding it looks almost as long as the opportunity is large.
E-mail Henry Norr at hnorr@sfchronicle.com.
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