TECH TALK: The Rs 5,000 PC Ecosystem: The WiFi Advantage

The Rs 5,000 PC (5KPC) is not going to bring about a revolution on its own. It needs to leverage other developments and technologies which together can enable the formation of an affordable computing ecosystem. Last week, we discussed briefly two of the elements of this ecosystem: the thick server and open-source software. The thick server is the one which does all the computing and storage. Open-source software is the platform for the applications. There is one additional element of the ecosystem we need to discuss before we go ahead: WiFi.

WiFi (802.11) offers wireless communications using open spectrum (2.4 Ghz and 5 Ghz) at speeds ranging from 11 Mbps (802.11b) to 54 Mbps (802.11g and 802.11a). The cost of wireless access points has fallen to under USD 100, while the cost of the cards required in the computers is down to under USD 50. In the next year, the incremental cost of adding WiFi to a computer is likely to be under USD 10 (Rs 500), as companies integrate the technology on to the motherboard itself. Hotspots (public wireless access points) are sprouting up all over the place in many countries.

Wrote William Gurley of Benchmark Capital in his recent Above the Crowd newsletter:

WiFi is to 3G as the personal computer was to the mainframe.

In the early days of the PC, most people considered the initial market for the IBM/Intel/Microsoft-based personal computer to be fairly narrow. In 1980, no one envisioned that one day you might run your company’s entire ERP system, or power a massive array of web sites on this technical architecture. However, the “increasing return” forces highlighted above eventually created a product that, from both a feature perspective and cost perspective, was appealing to a much broader array of applications and uses than ever previously envisioned.

This exact thing is currently happening with 802.11. This tiny, and increasingly inexpensive radio is already shockingly versatile. The same $30 radio can be used to serve wireless connectivity in your office, connect both your PCs and your multimedia in your home, and provide coverage to a police force across an entire downtown area. Add a Pringles can as a directional antenna (no kidding!), and this $30 radio is capable of providing high-speed, line-of-sight connectivity at a distance of 10 miles. In fact, the majority of the volume in the line-of-sight fixed wireless market has shifted almost entirely to low-cost 802.11 radios.

Originally designed to connect PCs and handheld computers to the network, people are now using these low cost radios for an increasing number of diverse customer applications. In remote areas, 802.11 can be used as a DSL alternative. Hospitals are using 802.11 not just to connect doctors and nurses but also to connect hospital equipment. 802.11 is a wonderful solution for industrial sensors in remote monitoring as well as control equipment designed to intelligently manage such things as power and HVAC systems. You can even use 802.11 to build an extremely cost effective video surveillance network. It is also feasible that 802.11 will be the driving force behind a wholesale conversion to VOIP and an entirely new phone structure in the enterprise.

So, why is WiFi almost free? The answer is (1) because the price of the parts could go as low as $5 over the next five years, and (2) because the entire PC industry has a vested interest in seeing 802.11 dominate over 3G. As such, within a matter of years, 802.11 will be a standard feature on every single portable computer, with a marginal cost to the consumer of $0.00.

Tomorrow: The WiFi Advantage (continued)

TECH TALK The Rs 5,000 PC Ecosystem+T

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Rajesh Jain

An Entrepreneur based in Mumbai, India.