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Editorial
(February 21, 2001)
From Editor's
Desk...
"Starting in mid year of 2000, we saw the dot com startups feeling the
wrath of the unwary stock market. The financial pundits explained that the
industry could not deliver the profitability. Then came the information
technology infrastructure companies which got their stock evaluations
brought to earth. However, they left the telecommunications and optical
networking stars like Nortel intact until last week when even Nortel was
forced to tell the truth. We do not think that you can blame the US economy
entirely for the drop in stock prices. There never was structural
justification for the prices that investors were willing to pay for these
companies, including Nortel, Cisco, and AOL. We should lay the blame where
it belongs i.e. on manipulators of the market and gullibility of individual
investors.
What can our industry learn from
this sudden but expected turn of events? Will wireless and mobile computing
be the next industry in this trend? First of all, we do see strong
fundamentals in demand for wireless-based services during the next ten
years. Wireless revolution will happen for sure because it meets one of the
most important needs in human and business behavior. However we also see a
lot of industry rationalization coming in 2001 and 2002. No industry is
immune to the manipulations of the investment bankers and stock market.
Uninformed investors are taken in by rosy projections by PR companies and
business development professionals who do not fully understand how emerging
technology gets adopted, how long the selling cycle is, how long it takes to
implement new technology, how people adopt new business processes and how
whimsical consumers are. Therefore, we only stand by the potential
of future growth in wireless and mobile sector but we do not stand by
individual forecasts which we find aggressive. Also time lines for
implementing the infrastructure for nation-wide coverage, especially in
North America are
unrealistic. Europe and Japan will be ahead of North America by at least two
years. We, at MobileInfo.Com, do not accept the simplistic methodology employed by many forecasters
who depend on remote surveys as the basic method of
predicting future trends. Many of these interviewers have never implemented technology
projects in this space and do not understand what it takes to introduce
emerging technology. They do not probe their interviewees and lead them to the answers that
their clients want to hear. Nor do they take into account technical
difficulties, economic trends and the limitations in the capital market. This truth must come home soon. To
cut the argument short, we see longer durations for wireless Internet and mobile commerce to
become mainstream.
We are also disturbed by
copy-cat and me-too mentality of startup vendors. It appears from myriad of press
releases that we get daily as a website that every mobile computing company
wants to allow mobile users to access corporate data or online catalogs anytime anywhere on
smart phones. Where is the differentiation? Where is the domain expertise
about customer's vertical industry and the knowledge about how it does business?
Everybody thinks that consumers are waiting anxiously to receive coupons and
information about their client's products on cellular phones while they are
driving on the highway at 70mph. We think that consumers will first use only
action-oriented applications (stock-trading) and indulge in only those
buying activities which are done on the spur of the moment e.g. go to a
movie, buy entertainment tickets and reserve a seat at the restaurant. In
a second phase, when younger generation, in whose daily life the Internet is
an important medium, takes center stage, mobile commerce will take off. That
will be 8-10 years hence. Until then, there will be gradual but
steadily increasing growth only. May be, we can learn from Aesop's fable -
it was the slow and steady tortoise who won the race and not the perky and
fast hare who slept on the way.
We must be selective in our
wireless pursuits. We must use fundamental business principles. We must
focus on our core strengths. We must add value for our business customers
and consumers - it does not matter whether it is business related or
personal pleasure-related. In this context, I-Mode model will work so
long it meets innate human desire to communicate via pleasure. Is voice not
another form of that desire? We must also remind business startups to
listen to their intuitive business judgment as much as they do to the prodding
of VCs. If you have a choice, go for the VC who adds value and understands
the market well. If it is a pure investment play, they will drop you with
the first sniffle of the market.
Finally, let us remember that
new and emerging technology projects are affected first whenever economy
turns downward trend and budgets get cut. That starts the ball rolling and
both good and bad companies suffer. We are not saying that this can happen.
We are saying that that this will happen in our industry as well. Why should
it not, if we think and behave like our brethren in other IT sectors? We are
not a privileged class." - Chander Dhawan, Your Site's Managing Editor &
Principal Consultant
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