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 THE STAT 26Percentage of wireless customers who use their cell phones to take picturesMore Vitals
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FEBRUARY 18, 2004
Before Wi-Fi Can Go Mainstream It won't achieve the status it deserves until it overcomes several obstacles -- some doozies -- now keeping it stuck in a techno-limbo Early 2004 has been the season of Wi-Fi hope and hype. At January's Consumer Electronics Show in Las Vegas, the buzz was everywhere as gadget makers and technology companies trotted out TVs, stereos, cameras, speakers, and boomboxes designed to take advantage of wireless fidelity's short-range-radio functionality. Also known as Wi-Fi, this nascent technology promises transmission of data, including songs and movies, at sizzling speeds. Cell-phone and telecom companies have recently announced big deals to share -- and thus tie together -- Wi-Fi hotspot networks across the country. And more corporations are deciding it's time to cut the cord and turn on office Wi-Fi networks. So why, despite all that, does Wi-Fi feel like a technology that's here but hasn't quite arrived? Could be because, except for rapid growth in the number Wi-Fi access points that individuals can tap into, the revolution has been stuck in techno-limbo, with progress coming mainly in fits and starts. While Wi-Fi is available in more and more places around the country, many customers at Starbucks (SBUX ) or Borders (BGP ) may not be aware of the service, despite in-store promotions. What's more, a hotel chain and McDonald's may have different authentication mechanisms for their hotspots. Thus, Wi-Fi aficionados might have to recreate their user names, install additional software, tweak their network-configuration settings, or adjust their firewall software as they move one hotspot to another -- hardly a recipe for attracting the average Web surfer. PLUS-MINUS EQUATION. In short, Wi-Fi is now in that no man's land through which every important technology must pass on its way to becoming the Next Big Thing. It has escaped the confines of geekdom, but it's only starting to approach the tipping point that will transform it into a mass-market phenomenon. The signs of this are everywhere. Corporations drawn by the speed and lower cost of Wi-Fi are finding that while the technology is getting easier to manage, security is still a huge obstacle. Without good protection, every company laptop could provide a backdoor into the corporate network. Consumers are confronting the same plus-minus equation. It's now easier to install Wi-Fi access points that allow multiple computers in a home to use a broadband connection. But the new generation of Wi-Fi devices that are supposed to make it possible to stream video stored on a PC in the den to the plasma TV in the living room remain more bleeding edge than leading edge. Installation can be a hassle, and sifting through thousands of songs on your PC via a remote control in another room is painful. Though Wi-Fi is headed for technological stardom, in short, it won't get there until major progress is made on a number of initiatives now under way. BEYOND GARBAGE BANDS. That Wi-Fi is likely to become such a mass market was presaged by the banner year it had in 2003, as more users sought to further exploit the unlicensed spectrums of the airwaves. Unlike the segments of the electromagnetic spectrum that are reserved for cell-phone companies, the U.S. military, and broadcast TV, Wi-Fi's domain are the portions of the airwaves where, at least so far, the FCC lets anyone do almost anything they please. Engineers once called these garbage bands, since interference from microwave ovens and baby monitors would snarl communications signals. But technology developed over the last 20 years has turned garbage into gold by allowing fast transmission of data via these bands with less interference. In theory, the latest generation of Wi-Fi gear can move data at up to 54 megabits per second. That's 50 times faster than typical broadband speeds, though hardly anyone ever sees that yet because the wireline Internet connections that feed into a Wi-Fi distribution node rarely approach that velocity. Such promise pushed up sales of Wi-Fi networking equipment by 40%, to $2.5 billion, in 2003, according to tech consultancy Synergy Research in Scottsdale, Ariz. -- about two-thirds of it from sales of equipment to consumers. Sales of wireless access points for homes nearly tripled last year, to 22.7 million units, according to market research firm In-Stat/MDR. ONE-QUARTER CONNECT. In part, that's because Wi-Fi has become nearly a subconscious purchase for buyers of laptops. Over 2003, about half the laptops sold were Wi-Fi-enabled, and by yearend 2004, virtually all will be, according to Craig Mathias, founder of wireless consultancy Farpoint Group. Helping that rapid adoption no doubt is Intel's (INTC ) $300 million marketing campaign for its Centrino laptop chipset, now used in notebooks from the likes of Dell (DELL ), Hewlett-Packard (HPQ ), and Toshiba. At the same time, competition among makers of Wi-Fi equipment dropped the price of stand-alone access points and Wi-Fi adapters for desktop computers and older laptops to less than $100 and $50, respectively. In-Stat analyst Gemma Paulo estimates that one-quarter of all homes that receive broadband Internet service already have Wi-Fi as well. "It's still mainly broadband users who might feel comfortable handling networking stuff," says Paulo. Wi-Fi thus remains a small slice of the overall global technology market. Yet its sizzling growth provides an incentive to eliminate obstacles that otherwise might hold it in check. Perhaps chief among those is a lack of comprehensive roaming agreements that would let any customer who buys Wi-Fi service from a phone company, for instance, use the technology anyplace in the country. It was the cell-phone industry's ability to provide such coverage that eventually fostered the phenomenon of a cell phone in every pocket.
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