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Wi-Fi and 3G Can Coexist, Bring More Consumers into the Mobile World, Says ABI

June 11, 2003

Migrating today's wireless consumer to adopt data-enabled solutions has become the quest that mobile operators, OEMs, and others have taken up with increasing intensity.

3G networks, which have yet to launch in earnest, have promised to answer that call, but hotspots, or Wi-Fi applications, are currently providing plausible solutions for the experienced wireless user. The looming question for equipment makers and other players in this market is: can they coexist peacefully, acquire customers, and still be profitable?

Hotspots are rapidly becoming the focal point in today's challenged wireless industry, and what will continue the momentum is the rise of Wi-Fi enabled laptop users. Research firm Allied Business Intelligence (ABI) predicts that the number of WLAN enabled notebook users is ramping up, with an expected CAAG of 79%, reaching a potential 58 million users by 2008. With the success of Centrino largely unknown, yet with its marketing efforts providing widespread awareness to the industry, these numbers may grow even larger than current projections. This will have a serious effect in siphoning away data traffic from 3G networks.

"By offering consumers the ability to retrieve data from their laptop wirelessly at top-rate speeds, mobile operators are going to bring more data users to the table," explains ABI Senior Analyst Tim Shelton. "There may be more then one winner here in the long run, with Wi-Fi's success being the driving force that pulls consumers towards data driven services."

ABI's report, "Wi-Fi Networking Equipment: Worldwide Deployments, Drivers, Players and Forecasts for 802.11x," examines the deployments of WLAN equipment worldwide and provides a realistic outlook on where the industry is headed. This report also covers protocol and standards development, the opportunities and challenges for equipment vendors, and the challenges to deploying WLAN worldwide. Detailed examination of technology shifts, market leaders, and revenue by world regions through 2008 are also included. The study is available as a standalone report or as part of ABI's Wireless Operator Subscription Service.

On the other hand, cellular infrastructure manufacturers have been under continuing pressure in today's shrinking market size. Cellular networks continue to grow, but at lower costs, resulting in lower ASPs and revenue opportunities for infrastructure providers. The much-needed relief is currently being sought after in 3G network build-outs. In 2003 ABI projects that the infrastructure market will shrink to $16 billion, off its highs of over $20 billion in the past.

The question to ask is, will the build-out of 3G networks capture enough customers to make economic sense--especially if this same customer base migrates to using hotspots to retrieve data? ABI believes that over time, enough customers will exist in the market to make multiple wireless offerings both feasible and profitable.

 


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ISBN: 0470847751
This book discusses 3G services from the view of what is needed for the service to provide value to the user, what is the value proposition for the user, how will money be made out of delivering the service, and discussions on how revenue sharing propositions might work to benefit content providers and network operators. 3G operators should take note of this highly recommended book.

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