US Internet Users Going Wireless

The number of individuals using cell phones for wireless data applications among the US Internet population is set to increase from the current 3 percent to an estimated 78 percent in the next 12 months, according to research by the strategic research group within the E-Business Unit (EBU) of Cap Gemini America and Corechange, Inc.

Presently, one-third of the US population uses cell phones for business purposes. Of this group, only 11 percent are currently using them for data applications, representing merely three percent of the entire population. In this research, wireless data applications entail using a cell phone to send and receive email or business/personal information.

Apart from the astonishing potential, a key finding of this research is that 47 percent of the future users explained that the primary reason for using wireless data applications is that someone else (i.e., the employer) pays for it. This was by far the most important reason. Consequently, market growth will initially be driven by corporate initiatives rather than consumer demand.

“The wireless data application market will probably not take off until major corporations start putting integrated PC and wireless PDA (e.g., cell phones and Palm Pilots) application structures in place and fully cover the costs for operating it,” said David Ridemar, head of strategic research group Cap Gemini America EBU. “In order for these initiatives to be successful, wireless business data applications have to be a natural part of the company’s Intranet corporate portal, making it effortless for employees to switch from a PC to a cell phone to a Palm Pilot, using the same business information and level of functionality.”

The research also indicates that this is a market for heavy users. Seventy percent of the present users use wireless data applications on their cell phones at least once a day and 60 percent use it for at least 1 to 3 minutes per occasion. In the future, 88 percent will use it at least once a day and 19 percent will use it more than three times a day. Sixty-six percent will use it more than three minutes every time. This indicates an enormous growth in wireless traffic data.

A large part of the population prefers to use the wireless data applications for a number of purposes. Fifty-two percent explained that they will use the functionality for a mix of email, personal data, and business information, 24 percent will use it for email and personal data and 13 percent will use it for email only. Hence, the corporate wireless data structures have to allow for both personal and business needs.

“The research concludes that with the right initiatives, this technology unleashes new types of demand and growth,” said Ulf Arnetz, CEO and founder of Corechange. “Just think about the untapped potential in the US, Europe, and Asia suddenly making it possible for employees to access business information that previously was not accessible due to lack of local IT infrastructure.”

The research is based on a survey of 1,000 Internet users in the US.

Research by International Data Corp. (IDC) more than 40 million US households are online, but there are more than 75 million cellular/PCS subscribers and more than 40 million paging subscribers.

“IDC predicts that by mid-2001, all digital cellular/PCS handsets shipped in the world will be WAP-capable,” said Iain Gillot, vice president, Worldwide Consumer and Small Business Telecommunications research at IDC. “So, it’s very realistic that the majority of Internet access will shift so that it is through wireless and not wired means.”

According to IDC forecasts, by the end of 2002, there will be more wireless subscribers capable of Internet access than wired Internet users. When this happens, there will be a fundamental shift in the thinking of the Web community and the IT industry as a whole.

“Once there are more wireless Internet users than wired users, Web masters may first consider the needs of the wireless users and secondly, the wired PC users,” Gillott said. “Today, Internet sites have to be retro-fitted for wireless users, but three years from now, it is conceivable they might have to be redesigned for wired users.”

According to IDC, the factors driving the shift to wireless Internet access include e-customer care for carriers, e-billing, and notification services.

The Strategis Group also expects an increase in the number of Web-enabled Smartphones. According to Strategis Group research, revenue from the sale of Smartphones is projected to grow more than ninefold by 2005 to $7.8 billion. Smartphone sales this year are expected be bring in $867 million.

“Smartphone manufacturers tell us that beginning next year the majority of new handset models will be wireless application protocol-enabled,” said Cynthia Hswe, analyst with The Strategis Group. “This creates a unique supply and demand situation where new users will receive handsets with wireless data capabilities whether they plan to use them or not. We estimate annual Smartphone sales will reach 60.3 million units by 2005.”

The Strategis Group also estimates there will be 9.5 million mobile high-speed data subscribers by 2005; 6.8 million of them business subscribers, and 2.8 million of them residential subscribers. In a survey of current wireless phone users, more than one-third said they would be interested in a wireless phone that can access the Internet. Even among non-users of wireless phones, The Strategis Group survey showed 20 percent would be interested in a wireless phone with the ability to access the Internet.

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