A Look Back at the Wireless Year That Was
By Bryan Morgan, Tue Jan 08 00:00:00 GMT 2002

For many of us, 2001 was the year that wireless data began to make significant inroads into our everyday lives.


Looking back a year ago, the NASDAQ had already begun its precipitous decline, however it appeared to be bottoming out around the 2500 level. Wireless data upstarts such as Palm, Aether Systems, and Metricom were still managing to hold on to their stock market successes as the Street continued to hold out hope for wireless, after turning its back on the Internet sector.

Since then, Palm's share price has dropped from $40 to $3, Aether Systems from $73 to $8 and Metricom - after soaring over 50% in December 2000 - has now been de-listed and acquired by Aerie Networks for $8.5M. This has clearly not been a banner year for the wireless industry with innovative companies shutting down, the exorbitant prices paid for 3G licenses beginning to come back to haunt some carriers, and no real "sizzle" to consumer-oriented wireless data offerings (particularly in North America).

But, important groundwork was laid that will begin to pay off in the years to come. Let's take a look back at the year that was, making sure to highlight the bright spots as we move into 2002!

Trials and tribulations


Perhaps one of the biggest stories of the year was the trials and tribulations of Palm, the company behind the most popular handheld OS (Palm OS) and the manufacturer of a popular line of PDAs. As Palm has become a media symbol of the coming ubiquity of mobile devices, their name seemed to repeatedly pop up in the news.

The year began with a bang for Palm, with the device manufacturer owning over 50% of the handheld market, nearly 80% if you count all PDA's running the Palm OS. Fresh off a successful IPO, Palm announced plans in March to acquire publicly traded Extended Systems, an "infrastructure" company noted for its middleware and communications software for the Palm OS and a wide variety of other platforms.

Then it hit.

The NASDAQ took a massive dive shortly thereafter, leaving Palm's once-lucrative offer to Extended Systems looking less and less worthwhile with each passing day. Finally, in May, Palm announced that their proposed acquisition had fallen through. This news was followed up by two announcements that spelled trouble on Palm's horizon: Compaq announced that they had shipped their 1,000,000th iPaq (who knew they were that successful?), while Gartner also announced that Compaq's PDA revenues would actually top Palm's in coming quarters. This last bit of news came as a shock to the system of an industry accustomed to Palm's gaudy market share numbers.

Palm closed out the year with a string of announcements designed to help the coming as it moves forward. These included plans to split its operating system division into a separate business, the resignation of their CEO, Carl Yankowski, an acquisition of NYC-based ThinAirApps, and concrete plans to shift hardware architectures to Texas Instruments' OMAP platform.

It is Palm's (as well as the entire wireless industry's) hope that the slowdown in consumer purchasing is only temporary. To meet this challenge, Palm aims to revamp their hardware and software offerings to support next-generation applications and communications technologies. Look for this strategy to begin to kick in during 2003.

Industry-wide


The wireless communications triumvirate of Motorola, Ericsson, and Nokia all saw their share of successes and failures during 2001.

Among them, Motorola was the first to market with Java 2 Micro Edition-enabled handsets with Nokia following closely behind. Motorola fought off mid-year rumors of a cash crunch but ended the year with a fourth straight quarter in the red. Motorola expects to return to profitability in 2002 and has reduced global head-count by 32% (nearly 50,000 employees).

Not to be upstaged by their U.S. counterparts at Motorola, Nokia launched the sleek 9290 PDA/phone complete with its own J2ME implementation. On the heels of this launch, Nokia president Pekka Ala-Pietila announced his company's plans to ship 100,000,000 Java-enabled phones by the end of 2003. Ericsson has seen its stock plummet from a high of $25 down to a miniscule $3 per share, thanks in part to major internal reorganization combined with an international slowdown in wireless equipment purchases.

The end of summer saw two major production introductions from industry heavyweights Microsoft and the WAP Forum. The WAP Forum introduced the WAP 2.0 specification, which includes among many other features, support for push applications and WTAI functionality. Despite WAP's checkered status among the general public, the WAP Forum continues to plow ahead - naming Bob Brown as its new CEO in November.

Microsoft launched its Pocket PC 2002 platform in early September with much fanfare, touting the OS's new user interface features as well as Microsoft's decision to standardize the Pocket PC around a StrongARM-based architecture. Perhaps most important from a wireless data perspective, Pocket PC 2002 adds native support for both Bluetooth and 802.11b wireless networking.

A number of factors, including software development tools, available applications, and advanced hardware architecture (when compared to arch-competitor Palm's devices), have led to some projections of the Microsoft platform overtaking Palm's market share in the near future so keep an eye on this race.

Live, learn, and move forward


In a year that felt like much of the industry was simply treading water to stay alive, some...well...stopped treading. Metricom's bankruptcy left nearly 50,000 (relatively) high-speed wireless data subscribers high and dry. The paging industry took it on the chin several times, with bad news repeatedly coming throughout the year (i.e. financial troubles at Metrocall, WebLink, and PageNet, PCIA conference cancellation, Motorola exiting the pager business, etc., etc.).

What do all of these developments portend for the future? For starters, we've learned that all things that go up at a really high rate of speed tend to fall back to earth at some point. From a wireless perspective, it's clear that the industry's ambition outstripped both the public's demand for wireless data services and the industry's own ability to deliver on their promises.

After being hyped constantly throughout 2000 and 2001, GPRS should begin to actually appear in large rollouts throughout North America and Europe by the end of 2002. With packet-based services and more advanced billing models, carriers should begin to effectively experiment with delivering services for which there is an actual market.

Microsoft's Pocket PC platform is also beginning to take on the look of the company's latest juggernaut, as enterprises begin to demand powerful applications combined with advanced technology on their employee's mobile devices.

Bryan Morgan was the founder of WirelessDevNet.com (The Wireless Developer Network) and is currently an independent writer and software developer. He is a columnist for Wireless Internet magazine and is also a regular contributor to WirelessWeek.com and InformIT.com.