Success: One Step at a Time
By Joachim Bamrud, Mon Sep 02 00:00:00 GMT 2002

Millions of people are now part of the mobile revolution, and uptake is increasing faster than you may think.


The last couple of years have
not been easy for the wireless industry. Not only did the technology
bubble burst (making it much more difficult to get financing), WAP
didn't generate the enthusiasm (and revenues) operators had
expected. Then came delays with the rollouts of GPRS phones and networks
just as carriers needed to boost revenues more than ever - partly as a
result of huge debt burdens after getting UMTS licenses.

As a
result, most independent analysts view operators' foray into the
wireless web more as a failure than success. "The carriers
over-promised on the mobile Internet and were not able to deliver on
those promises," says Becky Diercks, director of wireless research
at US-based In-Stat/MDR.

Says Robin Hearn, a UK-based senior
analyst with Ovum: "The Wireless Internet was born in a
hurricane.... we were supposed to replicate our thirst for information
in the wireless space, but this was impractical from the start... The
failure came through the inability of the industry at large to set
itself rational expectations, and to examine carefully exactly who it
was that was willing and able to pay for what was
available."

Improving


Learning from the extensive hype around WAP -
when operators worldwide talked about bringing the actual Internet (not
a scaled-down version of it) to the mobile phones - carriers have
generally been more cautious with GPRS announcements. Yet, industry
officials and analysts alike see the always-on and higher transfer
speeds of that technology as key to the success of the wireless
web.

However, while the current numbers of wireless web users
are lower than the industry had been expecting at this time, the figure
is far from a fiasco, either. According to In-Stat/MDR, there were 66
million wireless web users worldwide last year. Another estimate - by
eTForecasts - places the total at 89.8 million. That estimate placed
Western Europe at 17.1 million users, but if we add IDC's estimate
of 17.9 million, the total comes to 97.8 million.

Regular,
web-enabled phones are the most typical way that the wireless web is
accessed, although smart phones and PDA's are also increasingly
being used, experts say.

With more than 41 million wireless web
users last year, Japan led the way, according to eTForecasts and NTT
DoCoMo. South Korea came in second, with 16.5 million users and the
United States third, with 6.7 million users, according to eTForecasts.
European markets such as Germany, the UK and Italy followed, with 5.5
million, 3 million and 1.9 million, respectively, according to IDC
analyst Lars Vestergaard. (IDC defines "users" as people using
the wireless web at least once a month.)

Cardiac patients can be
monitored through wireless Internet devices so they don't have to
physically go to the hospital for daily or weekly routine check-ups.
House-hunting consumers can get the low-down on a house they see for
sale - and finalize the deal, thanks to the wireless web. Lawyers can
access case information and relevant legal codes - without having to
carry their heavy paper-equivalents.

Nearly all the major
airlines have wireless web sites, enabling travelers to get updated
information through mobile phones. In many countries (especially in
Europe), local transportation companies are providing updated
information on bus and train schedules. City guides offer hotel and
restaurant information, while movie theatres offer the current listings.


Throughout the world, local and international media are present
on the mobile web with especially tailored content. Sports fans are
among those most grateful for various wireless web sites with updated
information. And both wireless web sites and SMS are now being used
extensively by game enthusiasts worldwide on a scale even the most
optimistic analysts failed to predict.

All of these options are
reality - today - and are providing consumers with data they otherwise
couldn't get in the same fashion (anytime, anywhere). While voice
services are providing similar information, they are often more
cumbersome and time-consuming than clicking through their wireless web
equivalents.

Better


At the same time, an increasing number of
devices - especially so called smart phones - are featuring access to
the actual World Wide Web rather than WAP sites, thus boosting the
content available to mobile users.

On the other hand, content
like financial information (stocks, bank accounts, etc) and shopping and
payment services seem to have fared much worse than the industry had
expected.

To be sure, major hurdles remain for even more
widespread use of the mobile Internet. They include expanding the offer
of devices with larger (and color) screens and more user-friendly
keypads, increased data transfer speeds, easier mobile payment systems
and even more compelling content.

The early version of the web
- based on WAP through GSM, for example - has largely been seen as too
slow and difficult to use by many consumers expecting a PC-like
experience. WAP without GPRS meant that reading news headlines on your
mobile phone ended up costing the same as purchasing the actual
newspaper, points out Vestergaard.

For most Americans and
Europeans, the impact of the wireless web has been less pronounced than
in Japan, according to Diercks. "For consumers, they've had
more exposure to information services," she says. "Some
business people have experienced increases in efficiency and
productivity due to the technology, but this is certainly not
widespread."

In Japan, NTT DoCoMo's i-mode dominated
wireless web usage and boasted 34.1 million users, as of August 4.
However, while its 3G services (FOMA) only count some 120,000 users,
rival carrier KDDI says it now has 1.6 million users of its 3G service.
Thus wireless web usage continues to grow in Japan.

"DoCoMo
was the most successful in delivering on its promises, despite the fact
that i-mode was/is based on an antiquated network (PDC)," says
Diercks.

And Japan is also where the wireless web has had the
most significant impact yet, experts say. That's largely due to the
fact that Japan - unlike Europe or the United States - didn't
really have much Internet penetration through PC's when i-mode was
launched.

"I was at Qualcomm's BREW conference in
June, and the chairman of one of the Japanese carriers...said his
daughter came up to him one day and said, "Daddy, did you know that
a lot of people access the Internet through a PC?" That's a
serious impact," says Diercks.

The lagging U.S. uptake
compared with Asia and Europe is partly due to local, unique challenges
facing mobile technologies and extensive use of the traditional,
PC-based Internet.

"I-mode is a success [in Japan] because
people use it a lot, but over here [in the United States] it hasn't
impacted lives as much," says Tole Hart, a U.S.-based senior
analyst at Gartner Dataquest. "You don't talk about the
wireless web with friends."

Growth


But wireless web usage in the United States
is expected to grow significantly this year, as result of aggressive
promotions and the introduction of color screen phones and
next-generation technology. Major carriers like Verizon Wireless and
Sprint PCS have launched, or are in the process of launching, technology
based on CDMA (CDMA 1x) that can boost transfer speeds up to 144 kbps.
Verizon expects 90 percent of its 30 million customers to be covered by
the end of 2002, up from 65 percent of customers now, while
Sprint's August launch is nationwide.

At the same time,
U.S. carriers recently solved the problem of inter-operability for text
messaging, making that application more appealing. "Color screens
will probably help [but] it's messaging [that] will drive this
market," says Hart." I think SMS will have more of an impact
in the US the next couple of years."

Hart estimates the
number of wireless data users in the United States will reach 23 million
this year, a 58.6 percent increase from last year. That figure includes
both wireless web and SMS users. The main problem with the current
usage of the wireless web is that consumers are spending far less than
the operators - and content providers - had been counting on.
"Revenues [are] significantly lower in the short to mid-term than
some would have had us believe," Hearn says.

Interesting
enough, it's not the advanced wireless content that's bringing
in the money, but rather basic technology like SMS and ringtones. Says
Hearn: "Who would have thought ringtones and logos would be so
fundamental to the wireless revenue stream?"

The exception
again is Japan, where i-mode has been able to generate plenty of revenue
for both NTT DoCoMo and its content partners. SMS has also been a big
boon to operators, especially in Scandinavia.

That doesn't
surprise analysts like Hearn, who see SMS and ringtones and logos as
part of the key communications tools among consumers. "We must not
forget that the reason we have wireless communication devices, is
because we want to communicate and for the time being other uses will
remain peripheral - important undoubtedly in terms of encapsulating the
service proposition - but satellitic to the core raison d'etre of
mobile comms," he says.

The growth of the wireless web is
expected to continue. Both industry officials and independent analysts
believe that the new type of mobile devices featuring color screens and
built-in cameras will spur increased mobile Internet demand.

In
2004, there should be 398.3 million users of the wireless web worldwide,
eTForecasts predicts. Western Europe should account for 212.5 million
mobile web users in 2005, IDC forecasts.

"Mobility has had
an enormous impact on people's lives, but wireless web itself is
still finding its niche in the everyday routines of ordinary
people," Hearn says.

Joachim Bamrud is an award-winning journalist with 18 years
experience as a writer and editor in the United States, Europe and
Latin America. Bamrud has worked for various print, broadcast and
online media, including Latin Trade, Reuters and UPI.