Subject: [NEXTEL-1] SPECIAL REPORT: WI-FI’S GROWING PAINS

From: Marcelrf <[email-masked]>
Date: Wed, 18 Feb 2004 11:08:38 -0500

FEBRUARY 18, 2004

SPECIAL REPORT: WI-FI’S GROWING PAINS

Then There's UWB,
WiMax, wOzNet...

Wi-Fi may be just beginning its rise, but already a slew of alternatives
are bubbling just under the surface. Here's a rundown
It's an age-old story in the technology business: First comes the
breakthrough innovation. Then come the enhancements that compete with
and sometimes marginalize the initial discovery. For the next example of
this, keep an eye on Wi-Fi. Sales of the hardware that enables
high-speed, wireless access to the Net from homes, offices, and airports
will grow from $1.49 billion in 2003 to $2.94 billion by 2007, predicts
market consultancy Infonetics Research in San Jose, Calif.

Even as this happens, though, everyone from startups to the likes of
cell-phone maker Motorola (MOT ) will be feverishly developing new
wireless technologies that can do the jobs heretofore earmarked for
Wi-Fi. "I wouldn't say that we're trying to replace Wi-Fi," says
Motorola Director of Standards Realization John Barr. "But there's
overlap."

So much so, in fact, that some of the new technologies could take a bite
out of Wi-Fi's growth. This might take a while: The wannabes have yet to
prove their worth in the marketplace, and industrywide standards for
some of them still need to be agreed on, a process that's never easy or
fast. Still, rivals are lining up -- and Wi-Fi had better watch out.

HOME STREAM.  In homes, the biggest threat will come from a technology
called ultrawideband (UWB), which allows data to be transmitted at a
rate of 1 gigabit per second -- nearly 10 times the 100 megabits per
second for today's fastest Wi-Fi connections. Although UWB has a much
shorter range -- 30 to 60 feet, vs. 100 to 200 feet for Wi-Fi -- that
could be enough for many uses. For instance, UWB could replace USB
(universal serial bus) cords that now connect computers with peripherals
such as a keyboard and printer.

More important, UWB could be used to stream video from a DVD player to a
TV or from a PC to the stereo in the next room -- the type of
digital-home jobs that companies such as chip king Intel (INTC ) have
earmarked for Wi-Fi. The first such products based on Motorola's UWB
chips will show up in stores next Christmas, Barr predicts.

Outside the home, UWB could carve out a niche in specialized business
markets. For instance, doctors and nurses could use UWB to quickly look
up patients' charts and view bandwidth-thirsty digital X-rays, says Jeff
Harris, director of business development for privately held General
Atomics. The San Diego-based company will release its first proprietary
UWB chip this year.

CITYWIDE ACCESS.  More commercial and consumer applications will follow
as a UWB standard is ratified by the Institute of Electrical &
Electronics Engineers (IEEE), perhaps in late 2005. Overall, the market
is expected to grow from zero to nearly 6 million UWB nodes embedded in
various devices by 2007, according to tech consultancy In-Stat/MDR.

During this period, public Wi-Fi hotspots -- essentially, wireless
networks located in cafés, hotels, and airports -- could come under
attack by new data networks from the likes of Nextel (NXTL ), the No. 5
wireless provider in the U.S. This month, Nextel began testing a new
system built by privately held Flarion Technologies, based in
Bedminster, N.J., that would offer blanket access to the Net throughout
an area the size of a large city at speeds of 1.5 megabits per second --
vs. about 2 megabits per second for a typical Wi-Fi hotspot, which
functions only within a small area.

Experts say Flarion's technology could become the basis for a wireless
standard called 802.20, which is expected to be ratified by the IEEE by
yearend. It requires the installation of special hardware at
cellular-transmission sites that generally costs one-third to one-fifth
as much as the gear for other advanced data networks, says Ronny
Haraldsvik, senior director for global marketing at Flarion.

SPEED DEMON.  Customers would then connect to the 802.20 network via
special chips embedded in their mobile devices. Carriers will be able to
offer unlimited access to the network for perhaps $50 a month, says
Haraldsvik -- similar to what they charge for slower data networks.

Service providers could also adopt a wireless technology called WiMax --
or 802.16 -- which is expected to be pushed by the likes of Intel
starting this year. Imagine a beam of bandwidth that supports
data-transmission rates of up to 70 megabits per second within a 30-mile
radius of a WiMax antenna. Initially, WiMax will be used by broadband
providers -- such as phone companies that offer digital subscriber line
(DSL) service -- for last-mile delivery of broadband to consumers'
homes, says Scott Richardson, general manager of Intel's broadband
wireless group.

Within two to three years, though, WiMax's beam might also track a
special chip in wireless devices, Richardson says. The beam won't move
at the speed of a car, so it might be tough to check e-mail while
driving, says Yuanzhe (Michael) Cai, an analyst with emerging technology
consultancy Parks Associates in Dallas. Still, that would only cause
accidents, anyway. The technology would be best for a mobile worker who
wants to check e-mail during a stop at a gas station. The combined
market for 802.20 and WiMax hardware should reach about $1.5 billion by
2008, according to ABI Research, a tech consultancy in Oyster Bay, N.Y.

COMPROMISE-CHALLENGED.  Besides these technologies, which could become
industry standards, many new proprietary ones may surface this year.
Wheels of Zeus, a privately held, Los Gatos (Calif.) company started by
Steve Wozniak, co-founder of computer maker Apple (AAPL ), hopes to soon
release a product called wOzNet. Expected to be resold by Motorola, this
specialized hardware will offer more than just Wi-Fi, says Gina Clark,
vice-president for marketing and business development at wOz. It will
also incorporate global positioning system (GPS) capabilities, Clark
says, so people can keep track of where their children, elderly
relatives, or pets may be.

Of course, these new technologies will face multiple obstacles. Many of
their creators -- including Motorola and Intel in UWB -- have trouble
forging the compromises necessary to set industry standards. While they
bicker, consumer-electronics companies -- which always hesitate to adopt
proprietary technologies -- might instead opt for Wi-Fi for many uses,
says Kurt Scherf, principal analyst at Parks Associates.

After all, Wi-Fi is prevalent already: Nearly all laptops sold this year
will be set up for it, and Wi-Fi's highest-possible speed should triple,
to 300 megabits per second, within 18 months, predicts Craig Mathias, a
principal at wireless consultancy Farpoint Group in Ashland, Mass. So
for many consumer-electronics makers, Wi-Fi looks like a safer choice.

"ALL VAPORWARE"?  Proliferation of technologies such as WiMax -- which
is intended to be installed in service providers' towers and run by them
-- will also depend on carrier acceptance. By comparison, Wi-Fi
mushroomed because of a grassroots consumer movement. Service providers
such as phone company SBC (SBC ) are testing WiMax but are still
undecided on its use. Thus, "there's not really a competing technology
right now that could slow down Wi-Fi's momentum," says Brent Nixon,
product line manager for wireless systems at networking gear maker 3Com
(COMS ).

If there were one, Wi-Fi equipment makers would be quick to jump on the
bandwagon. At Netgear (NTGR ), a major manufacturer of Wi-Fi access
points, a product can go from concept to manufacturing in three months,
says Chairman and CEO Patrick Lo. Not that Netgear is planning an
all-out effort to release products based on any of the new technologies
any time soon: In terms of competing tech, "there's nothing yet," Lo
says. "For now, it's all vaporware."

Still, chances are that a few advanced products will hit the market
soon. For instance, WiMax service and TVs with UWB capability could come
out later this year. And soon after, consumers and businesses might be
able to chose which technology to use -- Wi-Fi or one of its newer
cousins.
http://yahoo.businessweek.com/technology/content/feb2004/tc20040218_3031_tc140.htm

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