Is the "Wi-Fi" wireless internet boom about to turn into a bust? COMMENTS WELCOMED

[Dave Farber <dave () farber net>]

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From: "the terminal of Geoff Goodfellow" <geoff () iconia com>


Is the "Wi-Fi" wireless internet boom about to turn into a bust?</a>

IT ALL sounds ominously familiar. A new technology emerges and is rapidly
embraced by technology enthusiasts. Hundreds of firms spring up, hoping to
cash in on its expected breakthrough into the mass market. Profits, or
having a sensible business model, are forgotten in the rush. But demand
proves elusive, a painful bust ensues, and only a handful of firms survive.
It happened during dotcom mania and is now about to happen again, albeit on
a smaller scale, to Wi-Fi, a popular way to surf the internet wirelessly.
...
Users may be deterred by high prices. Even after a recent round of price
cuts, using T-Mobile's network of hotspots costs $6 per hour, $40 per month,
or $360 per year. Other operators in America charge $40-70 per month. Prices
in Europe are as high as euro130 ($150) per month. A study by ForceNine
Consulting found that demand for Wi-Fi hotspots was highly price-sensitive,
and that further cuts might boost demand. Only 3% of tech-savvy American
consumers surveyed said they would pay $2 per hour for Wi-Fi access, but 20%
said they would pay $1. However, a subscription to one network of hotspots
does not entitle you to use others, so you may need one subscription in the
airport, and another in the coffee shop.

But there are more fundamental challenges facing public hotspots. The number
of people who carry laptop computers around is quite small. Daniel Sweeney
of Forward Concepts, a consultancy, points out that travelling
businesspeople and other "road warriors" have proved an illusory market for
wireless-data firms in the past. Unless Wi-Fi is added to mobile phones,
most people will not carry a Wi-Fi-capable device. And unlike a mobile
phone, which can be used anywhere, any time, Wi-Fi hotspots depend on casual
usage. "That's a shaky foundation for a communications business", says Mr
Sweeney.

--snip--

http://www.economist.com/research/articlesBySubject/displayStory.cfm?story_i
d=1883109&amp;subjectID=348963


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geoff.goodfellow () iconia com * Prague - CZ * telephone +420 603 706 558
"success is getting what you want & happiness is wanting what you get"
http://www.nytimes.com/library/tech/99/01/biztech/articles/17drop.html
http://www.tapsns.com/members-bio/geoff-goodfellow.shtml



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