Wireless Looks for a Lift to Clear Adoption Hurdles

The number of U.S. wireless Web users will increase from 4.1 million in 2000 to 96 million in 2005, according to Jupiter Media Metrix, but the market must still contend with the same old hurdles.

Among the obstacles facing wireless Web users are bandwidth limitations, multiple service platforms and numerous competing service providers.

“While the number of people in the United States logging on from mobile devices is about to enter a period of rapid growth, the wireless industry must not underestimate the complexity of delivering Web services in a highly competitive and fractured environment,” said Seamus McAteer, senior Jupiter analyst. “This means the industry must hold back on ambitious plans to deliver mobile multimedia, and instead focus on delivering simple yet practical interactive services, such as games, short messaging and location-specific directories — all of which are viable across multiple networks and narrow bandwidth.”

Despite the promise of 3G broadband mobile networks, its services will not be seen in the near term. Instead, the U.S. market will be home to narrowband connections and packet data services, which will support economic delivery of highly interactive applications. While broadband mobile connections will provide a viable target platform in Japan within two years, companies focusing on the United States or European markets must wait between four and six years. The U.S. rollout of location-based services will take at least two years because of FCC mandates to provide precise positioning for 911 callers. However, major European carriers will begin to promote this capability within the next year using less-specific location data.

Jupiter also predicts that U.S. regional carriers will struggle to survive against national carriers, and these will likely decrease in number to three giants within five years. At the same time, intense competition in the handset sector will yield carriers a greater degree of control over the platform for mobile content. Carriers in the U.S. will likely not enjoy the same clout as their counterparts in the Japanese market, which is characterized by tight adherence to technology standards devised by mobile operators.

In the United States, wireless devices have been popular among young people, a group that many experts predict will decide the fate of wireless in North America. Young adults age 10 to 24 may be the fastest-growing market for wireless voice and data services in the United States over the next several years, according to Cahners In-Stat Group, which predicts the number of young wireless subscribers will reach 43 million in 2004, up dramatically from the current 11 million. By 2004, half of U.S. youths will own a wireless phone and nearly three out of four will use one .

“This age group, usually lacking a credit history, represents a credit risk for carriers,” said Becky Diercks, director of In-Stat’s Wireless Service. However, carriers have devised prepaid services and family plans that require parents to pay for service to accommodate young subscribers. In order to boost wireless data use among youths, carriers offer specially targeted content including sites providing shopping, news, games, entertainment, education and other types of youth-oriented content.”

According to In-Stat, many parents will purchase phones for their children, so carriers should tout the ability to be in touch with kids anytime, anywhere and the safety advantages of this capability. Non-college attending youths from 18 to 24 will be the largest segment of the youth market.

Another obstacle facing wireless adoption has been the awkward interfaces of phones, which are designed for voice, not data. That’s why speech recognition technology could help fit the pieces of the wireless puzzle together.

According to a report by The Pelorus Group, the merger of wireless services and speech recognition will soon erupt into a multi-billion dollar juggernaut.

“You no longer have to hunch over a tiny keyboard or wade through an endless series of voice prompts,” said Mark Thompson, director of research at Pelorus. “Instead, using new voice portals, we simply speak commands to locate and listen to a diverse and ever-growing set of information alerts, including the latest news, stock quotes, flight information, traffic reports or weather alerts, plus personalized data and location-based directory assistance information.”

Voice interfaces will enable the increasingly large mobile public to communicate and tap into information on the fly, more easily, more safely, and more affordably. According to Pelorus, speech-enabled wireless Web subscriptions will increase from 5 percent of the market today, to close to 50 percent by 2005, generating more than $3 billion in revenues at that time.

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