Wi-Fi is quickly taking the place of integrated cameras and push-to-talk functions as the new hot technology for the handset market.
As a result, chipmakers, carriers and handset suppliers are rushing to take advantage of the perceived demand for such converged devices. And the market opportunity could be significant. Research firm IDC predicts phone makers will ship more than 100 million Wi-Fi-capable mobile phones in 2008, totaling around one-sixth of the entire phone market. Further, IDC handset analyst Alex Slawsby said 100 million could be a conservative estimate. He said some in the market predict shipments of between 200 million and 300 million by 2008.
“It’s going to be a bigger market than Wi-Fi notebooks,” said Will Strauss, president of analyst firm Forward Concepts Co.
Strauss said mobile phones sporting wireless local area network support have become the next hot topic in the industry-the newest trend in a market driven by trends.
“Every six months there’s a whole new scheme of things,” he said. “You find these things moving in cycles.”
Indeed, as the mobile-phone market accelerates, trends have moved from Internet-on-your-phone offerings to color screens to full-fledged gaming devices, all within the span of a few years. But despite the potential threat of a fickle market, carriers, handset makers and chip vendors nonetheless are moving full-steam ahead with WLAN-capable mobile phones.
Motorola Inc., an early player in the market, offers its WLAN-capable CN620 Mobile Office Device as well as its MPx smart phone. Nokia Corp. is shipping its 9500 Wi-Fi phone. Hewlett-Packard Co. offers its 6315 device, and DoCoMo recently began selling the N900iL.
“Certainly Wi-Fi will be the `in’ kind of thing for the next several quarters,” Strauss said.
And to judge the appeal of such devices, one needs only look to the world’s major chip suppliers, almost all of which now offer Wi-Fi support in their mobile-phone products. Even Qualcomm Inc., which had previously taken a somewhat standoffish approach to Wi-Fi technology, now supports the technology in its latest line of MSM 7600 and MSM 7500 chipset products.
Other supporters include Broadcom Corp., Philips, Infineon Technologies, Marvel Technology Group, Intel Corp., Agere Systems, Cambridge Silicon Radio and others. Indeed, Texas Instruments Inc. is on its third generation of WLAN-capable mobile-phone chipsets. The company has been working on the technology for two years.
“There are a lot of considerations” in building chips for mobile phones that support Wi-Fi connections, said Marisa Speziale, a TI spokeswoman.
TI has been working to shrink all of its chip components, but so far has shied away from investing the time and money needed to build a single chip that contains both Wi-Fi and wide area wireless technologies. Instead, the company is reducing the size of its offerings so that everything can still fit inside a mobile phone. Speziale said TI has managed to bring the device’s power consumption under control, which has been a key stumbling block in WLAN-mobile-phone converged devices.
Speziale said TI may consider combining both technologies on one chip, but that the market would “have to move one way or the other” to make the work worthwhile.
“The chip vendors seem pretty aggressive in supporting this (WLAN mobile phones),” said Allen Leibovitch, program manager for wireless semiconductors with IDC. “It is definitely a business that chipmakers need to be in.”
The demand for such devices is largely driven by the potential of Voice over Internet Protocol technology, as well as by Wi-Fi’s speedy data rates. Although still in its early stages, VoIP offerings from the likes of Vonage and others have sparked interest in a service that basically allows users to make free calls anywhere in the world. With Wi-Fi, users could place VoIP calls in areas covered by the short-range wireless technology. Thus, a handset that combines free calling in Wi-Fi areas with the mobility of standard wide area networks makes a compelling offering. And thanks to the Federal Communications Commission’s recent hands-off regulatory ruling on VoIP calling as well as Chairman Michael Powell’s apparent support for the technology, such offerings may soon be widely available.
However, some believe the constant march of mobile-phone technology could serve to constrain the WLAN-mobile phone market.
“3G is happening,” said IDC’s Slawsby. “I think the puzzle becomes more complex the longer it takes Wi-Fi to get into these devices.”
Third-generation technologies like W-CDMA and CDMA2000 1x EV-DO could supplant the need for Wi-Fi data speeds, although wireless carriers could still control the price for voice calls. But as newer technologies like HSDPA and WiMAX come onto the scene, the long-term benefits of Wi-Fi may decrease with time.
I personally see it (WLAN-mobile phone combinations) as a sort of an interim market,” Forward Concepts’ Strauss said. RCR
