Roland Piquepaille's Technology Trends
How new technologies are modifying our way of life

jeudi 25 décembre 2003

This special report from CNET carries an eloquent subtitle: "Wireless expectations rose in 2003, but growth was hobbled by security concerns and unproven business models." It's much more worse than you think and I'm going to tell you why Wi-Fi will not be still broadly used in 2004.

Basically, CNET says that consumer sales of Wi-Fi equipment were so good that it even led Cisco to sell directly networking gear to home owners by buying Linksys. On the other hand, businesses were not in a hurry to adopt the new technology, mainly because of security reasons. And this leads us to Intel.

Intel pumped $300 million into a marketing campaign for its Centrino mobile technology, which combines Wi-Fi parts and a processor for notebooks. The chipmaker looks likely to continue its role as lead cheerleader for Wi-Fi next year.

[Disclosure: I just bought a new Centrino-equipped laptop.]

The main problem with Wi-Fi is not a technological one. The technology works fine, but in so few places that it's practically irrelevant.

While gear sales took off, the reception for Wi-Fi hot-spot service -- public areas where wireless broadband is available -- was cool, causing some pioneers to pull back on their aggressive plans. But carriers and retail partners such as Starbucks, McDonald's and Borders began to lay the groundwork for future hot-spot installations, indicating that they expect consumers to warm to the service.

Technology columnists are usually looking at their own part of the world, in Silicon Valley or on the East Coast of the U.S. And obviously, their opinions are largely biased. Our world is much bigger than that. Let's take a look at two real-world examples.

Here I am, enjoying the end of the year in Lesvos, Greece. Of course, I have my Centrino laptop with me because I discovered before coming here that an access point was available.

Guess what? The responsible of the group building the local Wi-Fi network in the island told me in a private e-mail that access will be limited to permanent residents of the city. Of course, this is their gear and their time they invested in, but is it a good way to promote Wi-Fi? So what to do with my laptop? More tomorrow.

You probably think that Wi-Fi access is easier in larger cities, like mine, Paris, France. Forget it!

First, all the free experiments which started in 2003 in the airports, the railway sations or the subway have been shut down. You still can access some of these hotspots, mainly in cafes or in hotels, providing you want to pay between 6 and 10 euros per hour to one of the five current providers.

Is this an incentive to cross Paris, carrying your laptop, to meet a friend in a Wi-Fi connected cafe? I don't think so. As long as prices will remain that high, the utilization will remain very low. And of course, nobody will make money.

So if a hotshot from France Telecom or AT&T reads this, please read it twice -- and carefully. The universe is not limited to San Francisco or New York, where Verizon customers have free Wi-Fi access -- after they pay for other services. Nobody has found a right business model for Wi-Fi today.

But I'm sure of one thing. Paying $10 an hour for Wi-Fi access is almost twice as you pay for a movie. Would you pay $20 to see a movie? Probably not. So will you pay $10 to use a Wi-Fi connection for one hour? Certainly not.

Source: CNET Special Report, December 24, 2003

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