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Handheld device use ready to surge

NEW YORK – Although widespread adoption of wireless data remains more goal than reality, network operators, device makers and wireless applications developers have not wasted their efforts building the foundation for its eventual surge, said Jason Tsai, wireless services and data analyst for C.E. Unterberg, Towbin.

“Enterprises and carriers have been the only ones willing to invest in wireless data so far. It’s too soon for wide consumer adoption because the applications, phones and networks are limited. … Bluetooth will drive consumer adoption of wireless data,” he said at the New York-based investment bank’s recent “Wireless Internet” conference.

“The situation mimics a lot of what we saw with the wireline Internet five years ago, but it is far more daunting to implement wireless data.”

The Year 2000 was a foundation-building period, laying the groundwork for a “hockey stick” escalation of wireless data deployment and usage in 2001, Tsai said. Within five years, Unterberg, Towbin projects there will be 600 million data users of wireless phones, up from about 30 million in 2000. The number of handheld computers in use will rise to 150 million from 11 million last year.

“There is no consumer market today for wireless data, despite a lot of pressure to put it into retail. … We estimate the take rate of retail is in the 2-percent range, but you need shelf space and mind share, so companies are positioning themselves for an eventual retail market,” said Joseph Korb, president of GoAmerica, Hackensack, N.J., at the conference.

“Business requirements are very complex, and secure, scalable access to corporate databases is more important than cost.”

GoAmerica’s next move is to address the small office/home office market place through installation, now under way, of a platform from Toronto-based Centrinity.

“Unified messaging, the next-generation e-mail, has started to grow and will be a huge market. … Its penetration in wireless could reach about 50 percent,” said Richard LePage, chief financial officer of Centrinity.

“Hosted unified messaging service solutions will account for about two-thirds of our market, primarily through network service providers’ offerings to their small and medium-size enterprise customers. We have identified 300 carriers in North America and another 300 carriers elsewhere in the world as (our potential) customers.”

LePage dismissed as unrealistic the high volume of “noise” about unified messaging as a consumer service.

“Unified messaging is not a giveaway market. It’s a high-margin, high-value upgrade from voice mail to unified communications, which finds and archives e-mails, faxes and voice mails,” he added.

The Internet began in earnest in 1993 as an e-mail service, and evolved in 1996 into an access point to information on the World Wide Web. Its third phase, begun in the late 1990s, is a still nascent “bending toward applications in a mobile environment,” said Carl Yankowski, chief executive officer of Palm Inc.

In tandem, handheld devices also are undergoing their own evolutionary process. Still to come is the full-fledged execution of an idea General Magic pioneered in 1996, of dynamic content and location-based services, he said.

In January, a beta version of the MyPalm portal was released that Palm will co-brand with Sprint PCS. It is designed to provide users with mobile Internet access, including browsing, integrated access to e-mails sent to a user’s multiple addresses and personal calendar updates.

Also last month, Palm demonstrated a prototype of a device with electronic purse capabilities.

“Smart cards are a dying deal. Why not go straight to the Palm, which you’re already carrying around? Future Palms will be able to make secure point-of-sale transactions through embedded, virtual credit cards,” Yankowski said.

This month, Kyocera, a Palm licensee, is scheduled to introduce a device that integrates a wireless phone and personal digital assistant. By mid-year, Palm expects to debut devices “with a sled attached to the back for bar code scanners and Kodak pictures,” he said. During the second half of this year, the company plans to launch “an easy-to-use, synchronized e-mail solution with notification and instant messaging,” he added.

This year, the Palm IV operating system will include voice recognition, and Version V of the O.S., scheduled for release next year, will have multimedia capabilities for music, video and games, he said.

“Except for the original Palm, all our devices are flash-programmable, offering a migration path and investment protection, so you don’t have to throw the device away in order to upgrade,” Yankowski said.

Although some melding of wireless devices is under way, Novatel Wireless believes people will use more than one, choosing each for benefits relative to their tasks and environments at different times, said John Major, chief executive officer.

“Wireless data technology is emerging much faster than we saw in voice. PDAs are coming of age. We don’t care who wins the war. At the moment, Palm is dominant, but the Pocket PC is starting to emerge, and the H-P Jornada has an increasing segment,” he said.

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