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NOVEMBER 11, 2003
SPECIAL REPORT: NEW MOMENTUM FOR WIRELESS

What's Putting Wind in Wireless' Sails

Technologies, particularly network software and new applications, that have been in the works for years are now coming together
For the 15 years that couriers of delivery service Federal Express (FDX ) have used wireless technology, they've acutely felt its limitations. They've had to
rely on the FedEx internal network, since public wireless service was too slow and expensive. And they were limited to a few basic tasks, such as
transmitting codes of picked-up packages back to the office. If a customer asked a courier what the cut-off time was for sending letters overnight to India, the
employee could only shrug and suggest calling customer service.
Now, that's changing. Per-minute cell service prices have fallen 80% in the past decade, to less than 10 cents a minute -- undercutting the rates of FedEx'
own network. Thanks to recent upgrades, public networks have also become faster and more capable. So starting in mid-2004, FedEx' 50,000-strong
delivery staff will migrate to AT&T Wireless (AWE ) and a powerful new piece of internally developed software, which will let couriers answer most customer
questions, says Winn Stephenson, senior vice-president for technology systems at FedEx.
This decision is just one of many signs that a new era is dawning in wireless network technology. The U.S., long the developed world's wireless laggard, is
catching up, says Keith Waryas, an analyst at tech consultancy IDC in Framingham, Mass. -- and that's feeding into a recent and continuing revolution in
mobile software. Surveys of chief information officers show that mobile applications and networking are at the top of many corporate tech departments'
software shopping lists. And consumers are waking up to this new opportunity as well -- turning on to wireless applications such as fancy ring-tones, text
messaging, and games.
HYBRIDS A-POPPIN'. The catalyst for all this: Pieces of wireless technology that have been in the works for years are now coming together. For instance,
wireless service providers have increased network speeds with hardware and software upgrades. Last month, to take one example, No. 1 U.S. provider
Verizon Wireless rolled out DSL-like (for digital subscriber line) Net access speeds to its Washington (D.C.) customers whose laptops are outfitted with
special modems. And W-Fi (short for wireless fidelity, another technology for using the Web wirelessly at high speeds), is taking the U.S. by storm.

Those faster networks have turned tablet PCs and laptops into wireless devices. They've also allowed handset makers to roll out new gadgets such as smart
phones, a cross between a phone and a personal digital assistant (PDA). Unlike today's "dumb" phones, these devices include an operating system (OS) -the software that runs the basic functions of a computer -- and the processing power and memory that PCs had a decade ago. By 2007, perhaps 80% of all
handsets sold will contain an OS, estimates Ken Hyers, a senior analyst with market consultancy Cahners In-Stat.

which this fall has poured $300 million into marketing its Centrino laptop chip for wireless uses.S. an analyst at IDC. Pitney Bowes created its system with software from privately held Antenna Software and from software maker Siebel Systems (SEBL ). one of the country's largest crude-oil refiners. Today. however. which will ship its first device based on the standard this quarter. to get read-outs of temperature and other data relating to critical systems by simply walking past them. "At some point. On Oct. "Developers will be able to reach a much broader set of customers with each application. inventory. which. according to Handango. This trend will affect nearly every traditional software supplier. a year ago. 28.are rolling out new software-development tools. Due out in early 2004. business applications are where the most money is. 5 U. these programs simply replaced paper: Instead of carrying printed manuals. allowing mobile users to dip into customer. LIMOS ON CALL. says Ralph Nichols. Programs from mobile software company iAnywhere and privately held SAT allows workers at Lyondell-CITG Refining. This so-called middleware market is expanding fast: It should grow from $333 million last year to $1.for instance. Microsoft announced plans for Visual Studio for wireless. Location-based services are becoming more popular as well. It cut its emergency parts orders by 90% and its overall parts inventory by 15% -." says Jacob Christfort." Another critical boost for developers is the cell-phone industry's agreement on a standard java programming language for such offerings as games played on mobile phones. these efforts are leading to an explosion in mobile applications. this standard will reduce the number of alterations developers have to make to adapt an application to a particular device. chief technology officer for mobile products and services at database maker Oracle (ORCL ). estimates Steve Drake.up 70% vs. For a year now. More recently. you won't be able to sell your software unless it has a mobility feature. a unit of Sybase (SY ). president of software maker iAnywhere. corporations have begun using wireless software to help increase productivity and cut costs. "It will be a huge leap forward. INVENTORY UPDATES. which helped create the Symbian OS -. No. depending on the features.after equipping its repairers to wirelessly update inventory data when taking parts off the shelf. RFID beams the information onto their handhelds automatically. makers of mobile operating systems. "HUGE LEAP FORWARD." says Michael Bordelon. is taking off with businesses such as limousine companies. Already." Coupled with big investments by Microsoft and PC microprocessor king Intel (INTC ). whose dispatchers can now more easily figure out which driver to . Another popular new application is radio frequency identification (RFID). director of e-business at the Software & Information Industry Assn.6 billion in 2007. a provider of mobile content for downloading onto handheld devices. software developer PalmSource (PSRC ). Mail-sorter maker Pitney Bowes (PBI ) provides an example of what's to come. says Terry Stepien. when operators had to enter data by hand. when it's ready next year. Developers released 6. a service program manager at the company. the Linux community. vice-president in charge of consumer technology and software at handset maker Motorola (MOT ). will let developers familiar with Microsoft's PC software development tools create new programs for cell phones. and Nokia (NOK ). says Fred Hoch. In their original incarnations. which costs $5 to $70 a month. The service.An OS will enable those smart devices to run more complex software.saving millions of dollars -.480 programs in the third quarter -everything from games to business software -. airline pilots would download information onto their handhelds. and other databases back at the office. an approach that's much more efficient than one used only a few years ago. Its software already does -. wireless service provider Nextel (NXTL ) has used satellites to pinpoint locations of cell phones within 165 feet by using imbedded global positioning system (GPS) chips. including Microsoft (MSFT ).

to $366 million. says John Maffei. says CEO Laura Bordewieck Rippy of Handango. When the target gizmo accepts the message. a senior analyst with IDC. Sprint PCS (PCS ). estimates Dana Thorat. director of the platform strategy group at Microsoft. CROSS-TALKING DEVICES. 29. whose sales have been growing at 27% a quarter for the past 15 months. Cell carriers are starting to take the first steps in this direction by enabling cross-carrier text messaging. the device's software is automatically updated.S.S. In December. Bernard says. They will. T-Mobile.to handsets. Revenues of simple software such as ring-tones will more than triple over the same period. a leading distributor of wireless entertainment content.and also send a program to a stolen phone to kill it and secure the customer's private data. of course. cell-phone customers because the software that controls their phones can't be easily updated. carriers. And on Nov. Oracle will release an application server that lets corporate tech managers control remote devices by sending text messages to them. tech support staff now also has to fix a plethora of mobile devices. an analyst with wireless consultancy Adventis. cell phones and the software they run have to become simpler to use. says Andrew Cole.both in the U.and could revolutionize wireless shopping. Instead of just servicing PCs. Much remains to be done for wireless software to stimulate a boom. Bernard says Insignia can fix that -. Consumer software is hot as well: The U. Programs from specialized software company Insignia (INSG ) allow cell carriers and handset makers to send software fixes -. Similarly. 10/13/03. so that customers of one can engage those of another. not the item. Cingular. chairman and CEO of Seattle-based Mforma. wireless-gaming revenues should nearly triple. offer consumers and business buyers an alternative to paying with credit cards.S. GAME BOOM. that's another opportunity for software companies. What's more. . Among coming location-based services are ones that might let parents track their kids' locations via GPS-enabled phones. Many are looking at offerings from wireless software companies Qualcomm (QCOM ) and Portal Software (PRSF ) for a solution. says Maffei. essentially.) giant hopes to strike similar deals with U. On Oct.such as programs that fight viruses -. U. vice-president for Internet and wireless services at Nextel. next year. call quality is subpar for up to 20% of U. Some allow runners to keep track of miles. Next. it announced an agreement with British phone company Vodafone (VOD ) to create a standard way for developers to enable certain functionalities -such as using a desktop e-mail program to send a text message to a customer of any cell-phone carrier (see BW Online. Other popular applications include so-called productivity trackers. time. Providing such services is often difficult and costly. says Christfort. and abroad -. Microsoft is starting an all-out effort to enable cross-communication between different types of devices. In fact. The company expects to sign up its first U. a Drag Racing contest. privately held company are rising 20% to 30% per month. 6. cell carrier this quarter. she says. since they're used to billing by the minute. chief product officer at Insignia. says Greg Santoro. AT&T Wireless. Today. Sales of his profitable." Cell carriers are still working on wireless payment systems.send on a call. the Redmond (Wash. Test versions of such applications should come out in the second half of 2004 -.S.eventually providing merchants with entré to more than 100 million U. such as wireless PCs and phones. PC owners.S. says Peter Bernard. wireless gaming market is growing at five times the pace that it did in mobile pioneer Japan during the same stage of development. says Dan Kranzler. since it'll be possible to charge purchases to wireless accounts -. "MOST SIGNIFICANT TREND. "Time for New Thinking in Telecom").S. Early next year. Yet.S. and performance while training for marathons. Kranzler says. One need is more cooperation between carriers. and Verizon Wireless launched America's first multi-carrier game. to $57 million.

Still. those problems could be solved quickly. a director of market development at Intel. And no one with a stake in the business wants to be left behind. "The ability to work wirelessly will be the most significant trend in computing over the next couple of years." says Jeff Krisa. All rights reserved. by The McGraw-Hill Companies Inc. Ore. By Olga Kharif in Portland. with industry players threatened by increased competition and declining per-handset and per-customer revenues. Terms of Use Privacy Notice . Copyright 2000-2004.