The Wireless Internet
Ever since its conception, wireless
carriers and analysts alike have touted the wireless Internet as The
Next Internet. Many companies, for both corporate and commercial
purposes, have implemented strategies based on this premise, creating
entire departments devoted to keeping pace with this evolving
technologyspeeding them into the next generation of Internet access.
Following the belief that the wireless Internet would evolve at the same
breakneck speed that the wired Internet did six years ago, these
companies have poured money into developing wireless portals, vying for
dominance in an as yet unproven field.
Some industry analysts even trumpeted the
emerging wireless Internet as becoming the predominant medium for
Web-browsing and mobile e-commerce (m-commerce). The e-commerce
boom began on the wired Web five years ago, and investors wanted nothing
more than to be there when this phenomenon plays out again in the world
of wireless. Caught up in the frenzy, Internet service providers
and other consumer portals of the wired Internet rushed to develop and
market wireless versions of their existing Web sites.
These companies soon discovered the
caveat that lay behind anytime, anywhere accessibility to their portals:
mimicking the look and feel, the magic, of a Web site on todays
wireless, hand-held devices is an impossibility; a whole new set of
rules must be learned and applied. Further exacerbating the
situation is the abundance of competing technologies, standards,
protocols, platforms, and devicesmany of which are incompatible and
require their own individual set of rules and restrictions.
Some industry experts have gone so far as
to liken the current state of the wireless Web to the now prehistoric
days of the wired Web, when users tapped into bulletin boards using a
300-baud modem. The grim reality is that when compared to its
predecessorfor those accustomed to the rich content and graphical
offerings of the current wired Internettodays wireless Internet is
no more than a bastardized counterpart with severe functionality
handicaps. The small size and graphical limitations of a wireless,
hand-held devices screen, coupled with mere rudimentary interface
capabilities, place severe restrictions on what content can be offered
and how it is accessed and displayed. Applications that feature
rich graphical displays are doomed, as are Web sites that are several
levels deep, because they require too many keystrokes to navigate.
These limitations are only compounded by current bandwidth and data
transmission speeds, generally 9.6 to 14.4 Kbit/s. Such a platform
does not drive a consumer market.
Analysts said that wireless would be The
Next Internet. Its not. They said it would drive
m-commerce. It hasnt. The only thing that outperformed
expectations was the hype.
Today, companies are backpedaling.
The most notable scaling down has been Amazon, who, in light of
disappointing revenue$1 million from m-commerce versus $2.8
billion overall for 2000has all but eliminated its m-commerce
department, which numbered some 38 employees at its peak.
The perception that enterprise wireless
Internet use would be leveraged by consumer use, where wireless devices
are most prevalent, has proven inane. Wireless Internet access
can, in fact, be uniquely exploited by mobile enterprise users: it is
optimized for anytime, anywhere access to time-critical information
(push or pull from corporate databases). In this respect, the
wireless Internet opens a floodgate for a variety of potential vertical
and horizontal industry applications.
Internet services such as e-mail and
short messaging services (SMS) are growing rapidly and will continue to
do so. These two data services alone, however, are incapable of
driving an entire market. The expectations of consumers for robust
and stimulating media have swelled too much for such a scenario to be
Extensive Web-browsing and m-commerce,
viewed as boons for the wireless Internet consumer market, are not yet
practicalgiven the present limitations on content, delivery, and
presentationand are not expected to exert any sizable market clout in
the near term. In the long term, as advances in technology allow
such innovations as streaming video and voice-activated applications,
perhaps even an as-yet unthought of killer application, these uses will
become more widely accepted by consumers. In the end though, the
interface and display capabilities of the mobile devices themselves,
which must be small-sized to remain practical, will endure as limiting
While Insight does not foresee the
wireless Web generating many opportunities over the next few years, the
overall sector of wireless data is expected to demonstrate sizable
growth during the forecast period, particularly in the area of business
data-only wireless services. Business data-only wireless
initiatives, and the growth of this market, are discussed in further
detail in Insights report entitled Wireless
Data, Wireless IP, and Vertical Markets, 2001-2006.
definition of a portal as a doorway, gate, or entrance is stretched to
the limit when referring to the Internet; a portal can be practically
any site, so long as it is one positioned as an entrance to other sites
on the Internet. Portals, essentially, are aggregators, providing
access to Web servicesgenerally search capabilities, e-mail, and
instant messagingand a plethora of content. From a financial
perspective, a portal should be a revenue-generating online community
that offers enticing interactive services.
A portal can be the
first place a user goes onlinethe default Web page set on a browser
or one selected personally by the userbut need not be; secondary
portals are those that provide equivalent content and services, but are
just not a users initial point of entry.
On the wireless Web,
many wireless carriers transform the home deck of a users
Internet-ready mobile device into a carrier-branded portalthe default
and premier portal for accessing the Internet with that carriers
services. It is through this carrier-branded portal that a user
has access to Internet services and can search the wireless Web.
Carriers aim to include all of the capabilities in their portals that
major wireless portals, such as America Online and Yahoo!, Inc. do,
hoping that users will not seek out such secondary portals because they
will want to retain their assigned e-mail addresses and bookmarks.
portals, whose evolution sprang as a solution to the variety and
disparate capabilities of mobile devices, have come to be known as
walled gardens; so named because wireless carriers dictate which
services and content, and ultimately which wireless Web sites, are
accessible. Many Web content providers disapprove of this
practice, arguing that wireless carriers are controlling subscribers by
limiting them to only those Web sites that have paid for the privilege
of admittance into their walled gardens.
Every Web site that
wants to make its content available through the wireless Internet must
create a version compliant with wireless application protocol (WAP) or
one of the other leading standards for wireless content delivery, such
as i-mode. Less than one percent of Web sites today have a WAP
counterparta further reason, stemmed from combined technological and
financial complications, why the wireless Web has not been adopted by
the consumer market as rapidly as industry analysts initially predicted.
In the US, the Internet
available to wireless users is considerably more limited than the wired
Internet. Few vendors have adapted their Web sites to accommodate
WAP or other standards. According to one research study that
considered 577 commercially-operated English language wireless Web
sites, 14 percent qualified as portals. In their findings, they
reported that these sites are not as user-friendly as their wired
Enterprise Wireless Portals
Many enterprises view
wireless as an extension of their existing Internet strategies.
The wireless Internet must not be thought of as a new platform, but
rather as a new technology for business modeling. Wireless Web
services should facilitate transactions and functions and improve an
enterprises value chain.
Even with todays
limitations of wireless speed, quality of service, and reliability, many
examples of sales force automation, customer care, health service,
warehouse management, and shipment tracking are already in use.
One thing is for sure: where value is achieved today will be
different from where it will be achieved three to five years from now.
Three significant technologies will change the future short-term value
of wireless data transmission:
2.5G and 3G
Once these technologies
are combined and harnessed, mission-critical solutions that sit behind
corporate firewalls and require broader wireless bandwidth will become
practical. Of those businesses that have a Web site in 2001,
approximately 7 percent also have a wireless Web sitea site with
special accommodations for mobile users. By 2006, the percentage
of businesses maintaining a wireless Web site in addition to a regular
Web site will grow to 12 percent.
Hand-held Wireless Devices
devices capable of somehow accessing the wireless Internet exist:
Internet-ready cellular phones, personal digital assistants (PDAs), and
two-way pagerseach possessing its own particular advantages and
limitations. With all of the available brandsNokia, Motorola,
Palm, Microsoft, Research In Motion (RIM)and operating systems for
themPalm OS, Windows CE, EPOC, Javait is amazing that any two
devices are able to operate on a single standard. As it currently
stands, some do not, most notably Palm, but most are making efforts to
accommodate either one or both of the primary standards for wireless
content delivery, WAP and i-mode.
PDAs are hand-held
computing devices that have an operating system and memory. These
extend pared-down computer functionality, allowing the downloading,
storage, and execution of code. Screen sizes vary, but generally
are limited to 160 x 160 pixels. In contrast, Web-enabled cellular
phones, which are forecasted to become the predominant mobile device of
choice for wireless data, are considered to be relatively dumb devices.
Aside from the usual voice and data services, they offer limited
microbrowsing capabilities for viewing text-only Web pages on a very
small screen. Two-way paging devices are the most handicapped,
capable only of sending and receiving short messages and, now,
retrieving information snippets, such as stock quotes, horoscopes, and
sports scores, from the wireless Web.
In the coming years,
the value of a mobile device will be determined by how well it captures
and presents user-based services. The challenge is not just
information, but anytime, anywhere access to that information, and the
ability to personalize a device for improved control and efficiency.
Eventually, some devices will come equipped with intelligent controls to
discriminate between crucial and non-crucial contacts and identify
information that the user would want to receive immediately.
In the US, the ultimate
vision of the wireless Internet requires major changes not only to the
text input, voice capability, and user interfaces of hand-held devices,
but also to Web site design itself. Most experts agree that
improvements in hand-held design and functionality are dependent upon
widespread adoption of protocols such as WAP.
In short, the wireless Web is currently
struggling through its formative years. The market for these
services will grow, but only as rapidly as advanced technologies are
deployed and more enticing applicationsaudio streaming, video
streaming, stock trading, and gamescan evolve. For now,
opportunities in the wireless data space will remain in the business
data-only wireless services sector.
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1.1 The Wireless Internet
1.2 Wireless Portals
1.2.1 Enterprise Wireless Portals
1.3 Hand-Held Wireless Devices
2.1 The Overall Wireless Market
2.2 Wireless Data
2.2.1 Mobile Data Professionals
2.2.2 Mobile Data Consumers
2.2.3 Profile of All US Wireless Users: Voice and Data
2.3 Wireless Web Portals
2.3.1 Market Drivers for Wireless Portals
2.3.2 Wireless Web Issues
2.4 Response to the Wireless Web
2.4.1 Business Response
2.4.2 Consumer Response
2.5 Wireless Service Providers
2.5.1 Walled Gardens
2.5.2 Europe and Asias Effect on the US
2.6 Wireless Network Migrationp
2.6.1 Advanced Mobile Systems
2.7 Wireless Devices
2.7.1 Cellular Phones vs. Personal Digital Assistants
2.8 Application Service Providers
2.9 Barriers to Enhanced Wireless Data Services
2.10 Wireless Web Innovations
2.10.1 Wireless Web Voice Technology
2.10.2 Wireless Web Payment Models
2.10.3 Location-Based Services
2.10.4 Wireless Video Phones
2.10.5 Electronic Wallets
3.1 Wireless Web Challenges1
3.2 Wireless Data Network Technology
3.2.1 Circuit-Switched Wireless Networks
3.2.2 Cellular Digital Packet Data Wireless Networks
3.3 Wireless Infrastructure Requirements for Data Transmission
3.3.1 Migration to 3G Networks
3.3.2 Carrier Migration Strategies
220.127.116.11 AT&T Wireless
18.104.22.168 Cingular Wireless
22.214.171.124 Sprint PCS
126.96.36.199 Verizon Wireless
3.3.3 Stumbling Blocks
3.4 Wireless Application Protocol
3.4.1 Key Features of WAP
3.4.2 WAP Architecture
3.4.3 Wireless Markup Language
3.4.4 i-mode to Challenge WAP?
3.4.5 Java 2 Micro Edition
3.5 The Reality of Wireless Application Protocol and Next-Generation Networks
3.7 Voice Extensible Markup Language
3.8 Web Transcoders
WIRELESS SERVICE PROVIDERS, WIRELESS PORTALS, AND DEVICE MANUFACTURERS
4.1 Wireless Carriers
4.1.1 AT&T Wireless
4.1.2 Cingular Wireless
4.1.3 Nextel Communications, Inc.
4.1.4 Qwest Communications International, Inc.
4.1.5 Sprint PCS
4.1.6 Verizon Wireless
4.1.7 VoiceStream Wireless Corp.
4.2 Wireless Portals and Internet Service Providers
4.2.1 AOL Time Warner Inc.
4.2.3 Yahoo!, Inc.
4.2.4 Other Significant Players
4.3 Device Manufacturers
4.3.2 Motorola, Inc.
4.3.3 Nokia Corp.
4.3.4 Palm, Inc.
WIRELESS PORTAL VALUE CHAINS
5.1 Enterprise Wireless Portals
5.1.1 Enterprise Wireless Portal Capabilities
5.1.2 Enterprise Wireless Portal Issues
5.2 Wireless Web Site Deployment
5.3 Wireless Service Providers and Enterprise Wireless Portals
5.4 Enterprises and Wireless Technology
5.4.1 Achieving Return on Investment
5.4.2 Real-Time Wireless Access or Synchronization?
5.4.3 Field Sales Scenario
6.2 Wireless Revenues
6.2.1 Voice and Data Revenue
6.2.2 Data-Only Revenue
6.3 Enterprise Portals
6.3.1 Key Market Trends and Challenges
6.3.2 Businesses with Wireless Web Sites
6.4 Wireless Web Site Costs
I-1 Business Data-Only Wireless Revenue, 2001 and 2006 ($Billions)
I-2 Percentage of Web Sites with a WAP Counterpart, 2000
I-3 Percentage of Businesses with a Wireless Web Site, 2001 and
II-1 Total US Public Network Wireless Data Professionals, 2001
and 2006 (Thousands)
II-2 Reasons for Not Adopting Wireless Web Technology, 2000
II-3 Reasons Why Consumers Choose Not to Purchase Mobile Data
II-4 Wireless Device Users Plans to Shop Online, September 2000
to February 2001
II-5 Top Service Providers' Wireless Web Subscribers, 2000
II-6 Top Service Providers Wireless Web Subscribers as a
Percentage of Total Wireless Subscribers, 2000
II-7 The Competitive Environment for Command of Wireless Web
II-8 Type of Online Activity, Mobile Phone vs. PDA, 2000
II-9 Usage of US Mobile Phone and PDA Owners, Business vs.
II-10 Application Service Provider/Wireless Application Service
II-11 Wireless Speech-Enabled Sales Applications
III-1 Wireless Application Protocol Architecture
III-2 Personalizing the Wireless Gateway
V-1 Digital Coverage in the US, End of Year 2000
VI-1 Total Residential vs. Total Business Wireless Revenues,
VI-2 Wireless Data Penetration as Percentage of Total Wireless
Revenue, 2001 & 2006
VI-3 Total Residential vs. Total Business Data-Only Wireless
Revenues, 2001-2006 ($Billions)
VI-4 US Businesses with Web Sites, With vs. Without Wireless Web
Sites, 2001-2006 (Millions)
VI-5 Expenditures for Developing/Maintaining a Wireless Web Site,
II-1 Customers Making Wireless Stock Trades, by Financial
Institution, Mid-Year 2001
III-1 WAP Pros and Cons
III-2 Wireless Web Fiction vs. Fact
V-1 Enterprise Portal Capabilities
V-2 Creating an Effective Wireless Web Site
V-3 Private Intranet vs. Public Internet Characteristics
VI-1 Total Voice and Data Wireless Revenues, Residential vs.
Business, 2001-2006 ($Billions)
VI-2 Data-Only Wireless Revenues, Residential vs. Business,
VI-3 US Businesses with a Web Site, 2001-2006 (Millions)
VI-4 US Businesses with a Wireless Web Site, 2001-2006 (Millions)
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