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 THE STAT 26Percentage of wireless customers who use their cell phones to take picturesMore Vitals
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NOVEMBER 11, 2003
What's Putting Wind in Wireless' Sails Technologies, particularly network software and new applications, that have been in the works for years are now coming together For the 15 years that couriers of delivery service Federal Express (FDX ) have used wireless technology, they've acutely felt its limitations. They've had to rely on the FedEx internal network, since public wireless service was too slow and expensive. And they were limited to a few basic tasks, such as transmitting codes of picked-up packages back to the office. If a customer asked a courier what the cut-off time was for sending letters overnight to India, the employee could only shrug and suggest calling customer service. Now, that's changing. Per-minute cell service prices have fallen 80% in the past decade, to less than 10 cents a minute -- undercutting the rates of FedEx' own network. Thanks to recent upgrades, public networks have also become faster and more capable. So starting in mid-2004, FedEx' 50,000-strong delivery staff will migrate to AT&T Wireless (AWE ) and a powerful new piece of internally developed software, which will let couriers answer most customer questions, says Winn Stephenson, senior vice-president for technology systems at FedEx. This decision is just one of many signs that a new era is dawning in wireless network technology. The U.S., long the developed world's wireless laggard, is catching up, says Keith Waryas, an analyst at tech consultancy IDC in Framingham, Mass. -- and that's feeding into a recent and continuing revolution in mobile software. Surveys of chief information officers show that mobile applications and networking are at the top of many corporate tech departments' software shopping lists. And consumers are waking up to this new opportunity as well -- turning on to wireless applications such as fancy ring-tones, text messaging, and games. HYBRIDS A-POPPIN'. The catalyst for all this: Pieces of wireless technology that have been in the works for years are now coming together. For instance, wireless service providers have increased network speeds with hardware and software upgrades. Last month, to take one example, No. 1 U.S. provider Verizon Wireless rolled out DSL-like (for digital subscriber line) Net access speeds to its Washington (D.C.) customers whose laptops are outfitted with special modems. And W-Fi (short for wireless fidelity, another technology for using the Web wirelessly at high speeds), is taking the U.S. by storm. Those faster networks have turned tablet PCs and laptops into wireless devices. They've also allowed handset makers to roll out new gadgets such as smart phones, a cross between a phone and a personal digital assistant (PDA). Unlike today's "dumb" phones, these devices include an operating system (OS) -- the software that runs the basic functions of a computer -- and the processing power and memory that PCs had a decade ago. By 2007, perhaps 80% of all handsets sold will contain an OS, estimates Ken Hyers, a senior analyst with market consultancy Cahners In-Stat. An OS will enable those smart devices to run more complex software. Already, makers of mobile operating systems, including Microsoft (MSFT ), the Linux community, software developer PalmSource (PSRC ), and Nokia (NOK ), which helped create the Symbian OS -- are rolling out new software-development tools. On Oct. 28, Microsoft announced plans for Visual Studio for wireless, which, when it's ready next year, will let developers familiar with Microsoft's PC software development tools create new programs for cell phones. "HUGE LEAP FORWARD." Another critical boost for developers is the cell-phone industry's agreement on a standard java programming language for such offerings as games played on mobile phones. Due out in early 2004, this standard will reduce the number of alterations developers have to make to adapt an application to a particular device. "It will be a huge leap forward," says Michael Bordelon, vice-president in charge of consumer technology and software at handset maker Motorola (MOT ), which will ship its first device based on the standard this quarter. "Developers will be able to reach a much broader set of customers with each application." Coupled with big investments by Microsoft and PC microprocessor king Intel (INTC ), which this fall has poured $300 million into marketing its Centrino laptop chip for wireless uses, these efforts are leading to an explosion in mobile applications. Developers released 6,480 programs in the third quarter -- everything from games to business software -- up 70% vs. a year ago, according to Handango, a provider of mobile content for downloading onto handheld devices. Today, business applications are where the most money is, says Fred Hoch, director of e-business at the Software & Information Industry Assn. In their original incarnations, these programs simply replaced paper: Instead of carrying printed manuals, airline pilots would download information onto their handhelds. More recently, however, corporations have begun using wireless software to help increase productivity and cut costs, says Terry Stepien, president of software maker iAnywhere, a unit of Sybase (SY ). INVENTORY UPDATES. This trend will affect nearly every traditional software supplier. "At some point, you won't be able to sell your software unless it has a mobility feature," says Jacob Christfort, chief technology officer for mobile products and services at database maker Oracle (ORCL ). Its software already does -- for instance, allowing mobile users to dip into customer, inventory, and other databases back at the office. This so-called middleware market is expanding fast: It should grow from $333 million last year to $1.6 billion in 2007, estimates Steve Drake, an analyst at IDC. Mail-sorter maker Pitney Bowes (PBI ) provides an example of what's to come. It cut its emergency parts orders by 90% and its overall parts inventory by 15% -- saving millions of dollars -- after equipping its repairers to wirelessly update inventory data when taking parts off the shelf, says Ralph Nichols, a service program manager at the company. Pitney Bowes created its system with software from privately held Antenna Software and from software maker Siebel Systems (SEBL ).
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