BUSINESSWEEK ONLINE : DECEMBER 4, 2000 ISSUE
FRONTIER -- FORECAST 2001

ONLINE EXTRA: A Standard Problem: Nothing Works with Everything
For now, a mishmash of acronyms compete for dominance on the wireless Web. And that spells trouble for road warriors

They shop on their cell phones. They download video on their notebook PCs. They whip off e-mail on their personal digital assistants (PDAs). Yes, road warriors can make use of just about everything the Internet offers these days. They just can't do it with any consistency -- or from anywhere on the planet.

Why? There's a chink in the warriors' armor called communications standards. And while incompatible standards have hardly slowed the growth of the cellular-phone market, they've also helped hamstring the growth of the wireless Web. There are more than 105 million U.S. cellular subscribers today, up from 204,000 in 1985, says the Cellular Telecommunications Industry Assn. (CTIA). By comparison, industry pundits put the number of wireless Web users anywhere from a few hundred thousand to a few million.

Incompatible standards are nothing new in cellular. As analog cell-phone service boomed in the 1980s, mobile workers sometimes were affected by compatibility problems. But by and large, cell-phone callers were able to make a connection as long as some carrier's cellular antenna was in the area.

Digital-cellular communications, on the other hand, have boomed despite a mishmash of standards. In fact, nearly half of cellular subscribers now use digital networks, according to the CTIA. They've been able to connect because most digital phones switch quickly to analog when they roam beyond the area covered by their digital carrier or one of its partners. That won't work for the wireless Web -- it's inherently digital, so there's nothing to fall back on when a mobile user roams out of a carrier's realm.

ROADBLOCKS. There are other problems, too. Chief among them is the size of the screen. On a PC or laptop, variations in screen size aren't significant enough to affect Web-page display. But on the road, a mobile worker may want to access the Web from a tiny cell phone or a PDA -- and that means complicated pages, which can take forever to download, often come up as gibberish. To address this problem, technology companies have created different means of accessing the Web, such as wireless application protocol (WAP), which strips graphics and other data-intensive elements to present the text in a small format that can be read on a tiny screen.

Still, the main roadblocks on the wireless Internet highway are communications standards. Among the competing standards are code division multiple access (CDMA), time division multiple access (TDMA), and global system for mobile communications (GSM). Sprint PCS and Verizon Wireless use CDMA and cellular digital packet data (CDPD). AT&T uses TDMA and CDPD. SBC Communications Inc.'s Pacific Bell Wireless unit uses GSM.

That's not all. New standards, collectively known in the communications industry as "3G," for "third-generation," will be rolled out over the next several years. The 3G standards will bring two key benefits. First, they'll accommodate more users and more high-bandwidth traffic, allowing for smooth video. Second, they'll unite some standards, particularly TDMA and GSM.

One of the more important improvements is the deployment of general packet radio service, or GPRS. An enhancement to GSM, GPRS vastly improves bandwidth, providing instantaneous Internet access. Why is this important? "Now it takes 30 seconds, like a dial-up modem. There's a big difference between doing that on your desktop and standing out on the street corner doing it," concedes Ed Colligan, senior vice-president for sales and marketing and co-founder of Handspring Inc. in Mountain View, Calif. Handspring expects to start selling its new GSM-compatible VisorPhone before the end of the year.

Widespread GPRS service will take a little longer. While more than 360 million cell-phone subscribers worldwide were using GSM-based phones worldwide by the end of the year -- including 7.8 million in North America -- GPRS will not become commonplace until 2002, according to market researcher EMC. "I don't think we'll get any dramatic change by 2001, no quantum leap in our ability to do things wirelessly," concurs Roy Want, principal engineer at Intel Corp.'s research labs. That means until the carriers stop battling over standards, the road warrior will see limited action on the wireless Web.

By Kevin Ferguson

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