WLANs Appear to Gain Upper Hand on 3G Source (Bruce Gain - EBN)

Evidence continues to mount that wireless LANs, rather than 3G cell phone networks, will be the medium of choice for data communications access almost anywhere, anytime from laptops, PDAs, and cell phones. 

WLANs, one of the few fast-growing communications sectors, gained more recognition last week when Hewlett-Packard Co. announced its wireless initiative here at TechxNY (formerly PCExpo). The company plans to create a service business to set up WLAN "hot spots," or access points, in public areas such as airports, hotels, restaurants, and other locales. Later this year, IBM Corp. and Nokia also plan to collaborate on implementing a hot-spot strategy to provide WLAN access points worldwide. 

"From a consumer side, [the initiative] will open up opportunities and awareness, which consumers lack now. In cross-demographic groups consumers don't know about [WLANs]," said TaShana Jett, senior marketing manager at HP in Houston. "So the hot-spot concept will [accommodate] people frequenting parks, universities, libraries, or hotels." 

HP will use the service initiative to help generate demand for its notebooks and Pocket PCs with which users can connect to hot spots in various public areas. The project could also potentially spur demand for devices from other OEMs, according to Jett. 

The networks will comprise 802.11 access points from which users can log on to the Internet with a wireless link using either a corresponding 802.11 connection or a Bluetooth link. HP's service group will look to accommodate public venues worldwide and offer IT infrastructure support to see the different implementations through to completion. 

IBM's services group aims to bring Nokia's WLAN solutions to corporate users and will assist both telecom operators and wireless Internet service providers that may look to offer hot-spot services. 

Public hot spots
The success of the rollout of WLAN access points, PC cards, Bluetooth modules, and other WLAN components, however, is by no means contingent on HP's push into this networking arena. 

In densely populated areas such as San Francisco or New York, a laptop or PDA can already remain logged on to the Internet with a wireless connection by using signals from various existing access points while a user roams throughout many areas in either city. 

The number of WLAN public hot spots is estimated to grow worldwide to 42,000 in 2006 from 2,000 last year; service revenue is expected to reach $642.6 million in 2006, up from $11.3 million in 2001. 

Worldwide enterprise WLAN system sales are expected to grow to $3 billion by the end of this year, from $1.8 billion in 2001. Within four years, the number of users linked to a hot spot is expected to reach 21 million, according to Analysys Consulting, Washington. 

Landline alternative
WLAN hot spots also offer an alternative to adding landline capacity via traditional DSL or cable links, said Brian Halla, president and chief executive of National Semiconductor Corp., Santa Clara, Calif. "I can't imagine that cities will dig up all the bandwidth it takes to run fiber to the curb, and I think [WLAN hot spots] will solve the problem," Halla said. 

Meanwhile, the old argument remains that users generally will opt for wireless data access through the larger screens of portable PCs, desktops, and even PDAs instead of the small screens of cell phones, especially in the United States, where PC penetration is high. 

"Even if 3G infrastructures were ever in place, cell phones just don't cut it," said Bob O'Donnell, an analyst at IDC in Mountain View, Calif. "People just want wireless access with bigger devices compared to cell phones. In the U.S., we are used to bigger devices, although in many countries the first experience on the Internet for most users is with cell phones, so 3G is likely to see more acceptance in Asia or Europe." 

But the 3G rollout has been plagued by several factors. The second-largest telecom company in the United States and a strong proponent of 3G, WorldCom Inc., made headlines last week for its $3.8 billion fraud scandal while the specter of bankruptcy loomed. 

As telecom spending plummets at an unprecedented rate, the telcos continue to push 3G deployment back. Today, 2004 is the most frequently cited year for 3G to take hold. Previously, many telcos said the technology would begin to see a large-scale rollout this year. 

But as WLAN hot spots continue to grow in cities and towns, 3G networks are seen as the likely wireless data communications choice in sparsely populated areas that are out of the hot-spot range of slightly more than 1,000 feet. 

"We definitely see the two technologies as complementary," said National's Halla, which offers its Geode processors for 3G-equipped handsets. "Especially in the long term, there's a place for both." 

Source : Bruce Gain - EBN