WiFi Boom

The NYTimes has a series of articles on the growing availability of WiFi: “Subscription services and pay-as-you-go Wi-Fi hot spots are springing up in cafes, bookstores, hotels and airports, put in by companies like T-Mobile and smaller, start-up competitors like Boingo Wireless and Wayport. Last week, Cometa Networks, a new company backed by Intel, AT&T and I.B.M., said it planned to put a network of thousands of wireless access points across a huge swath of the nation by 2004. The result is a growing array of options for Wi-Fi users and the emergence of a mobile wireless culture that spans business travelers, teachers and students, people relaxing in coffee shops and even moviegoers waiting for the show.”

Some stats: “According to Gartner, the number of Wi-Fi cards sold in North America this year is on track to jump 75 percent over 2001, with another 57 percent gain over this year expected in 2003. William Clark, research director at Gartner, said that the number of frequent Wi-Fi users was expected to grow to 1.9 million next year from 700,000 in 2002, with the number of public hot spots in North America likely to nearly triple by the end of next year from about 3,300 now.”

An article earlier in the week in NYT said that the profit potential from WiFi was “tepid”.

While analysts hesitate to predict that any of these companies will survive to become widely recognized brands like Netscape, the resemblance to the Internet craze of the 1990’s has been widely noted. “There is a bit of a bubble here,” said Dylan Brooks, a wireless communications analyst at Jupiter Research. “We’ve had more than $2 billion in venture capital money flowing in, more than total revenues.”

Most of those ventures are destined to flop, analysts say. Even established technology companies like Cisco Systems, the leading seller of Wi-Fi gear; Symbol Technologies; and the Hewlett-Packard Company face an uphill battle to earn profits with Wi-Fi because competition is driving prices down so rapidly.

A Seattle Time article wrote: “Technology historians could look back at 2002 as the year a geeky wireless technology outgrew its grass roots and created a burst of excitement in the beaten-down telecommunications business. So much so that the technology, called Wi-Fi, had drawn the committed interest of industry giants by the end of the year…The story of Wi-Fi’s development in 2002 is one of setback and progress, struggle and victory. In addition to some confrontations between geeks and corporations, the year saw new product and security breakthroughs designed to build a stable platform for future growth.”


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Rajesh Jain

An Entrepreneur based in Mumbai, India.