No one is quite sure where the wireless Internet is going.
There is such a profusion of technology developed and offered on a daily basis-from PacketVideo Corp.’s streaming multimedia offering to BitFlash Inc.’s screen-scraping service-industry observers are constantly creating new categories for the latest release. And the topic is such a broad and vast one, with hundreds of players and a complicated and intricate value chain, it’s hard to even know where the wireless Internet is now, much less where it’s headed.
With all that’s happening in the mobile Internet industry, it might seem incongruous to say no one knows its current situation. But even wireless data veterans disagree over the specifics.
“We’re in an intermediate phase in which we can see the potential but the potential is far from realized,” said Mark Desautels, vice president of wireless Internet development at the Cellular Telecommunications & Internet Association.
“It has taken off and is taking off,” said Warren Wilson, director of the wireless practice at Summit Strategies Inc. “Wireless data is taking off.”
While it’s unclear where the mobile Internet is now, or where it’s going, everyone knows where it is not. The hype surrounding wireless connections to the Internet could not possibly live up to today’s reality, most in the industry agree. Today’s mobile Internet generally leaves users struggling with the slow network connections, small black-and-white screens and limited service offerings.
“There are a number of factors that continue to inhibit the take-up of wireless Internet products and services,” Desautels said.
One major stumbling block to a more interesting wireless Internet is the current fragmentation of wireless standards, Wilson said. There’s CDMA vs. GSM; the Palm operating system vs. the Pocket PC OS; and WML vs. xHTML-all of which make service and application development difficult, to say the least.
“The mobile Internet space is not totally defined today,” said Hans Davidsson, managing partner of IdeaEdge Ventures, a venture-capital firm focused on wireless Internet companies. “It’s kind of happening while we’re speaking today.”
The U.S. wireless industry knows mobile connections to the Internet have the potential to become a huge business-it must only look toward the East and NTT DoCoMo’s success, a prime example of the potential for user growth and the potential for profit.
The reason DoCoMo is so successful, many argue, is because the company doesn’t have to deal with the fragmented situation that companies in the United States must. As the only major carrier, DoCoMo is able to rule the supply chain because it’s the only one at the top. Application developers, handset manufacturers and the rest of the gang have to ante up or risk missing the game.
This structure “makes it really easy for both the providers and consumers of that service,” Wilson said, adding that the DoCoMo situation also spurs content providers to be more creative because they know and understand the standards. “It just sets up that spiral or tornado” of creation, he said.
In addition, users in Japan-and to a lesser extent those in Europe-can’t be disappointed by their mobile Internet experience because it’s the only Internet experience they have, many say.
While the wireless Internet industry in the United States bemoans the lack of a standards-setting DoCoMo, many U.S. players are also fighting to become it. The situation is almost comical: So many companies in the United States want to become the standard by which all mobile Internet content is developed and used there isn’t any standard at all.
“The basic standards are just being formulated” in the United States, said Jim Collas, also a managing partner at IdeaEdge.
And while standards are slowly being set, efforts to stimulate the wireless Internet industry in the United States generally face an almost philosophical problem: Should users expect the Internet to magically appear on their phone or just be forced to live with some dumbed down subset of the experience?
“It’s not the desktop experience and really can never be, so there’s really an education function that needs to be carried out to make the consumer mass market aware of the limitations and possibilities,” Desautels said.
Wilson said the mobile Internet will likely evolve into a smaller, more easily managed subset of the wired Internet.
“What we need to do … is take that subset down to devices,” he said.
Again, leaders in the industry disagree on this point as well.
“There’s only one Internet,” said David Downing, vice president of marketing for AlterEgo Networks Inc., which offers products to scale down Internet pages for the smaller screens of wireless devices. “The idea is to create a seamless user experience for the user regardless of the device.”
As this question continues to stir debate, it may be rendered moot with the advent of speedier connections through 2.5- and third-generation networks, along with other advanced services and products. Bluetooth technology, mobile commerce, location-based services, wireless advertising, smart phones, instant messaging, wireless multimedia applications, unified messaging and a host of other applications, services and technology are all aspects of the mobile Internet that could make it a huge hit with U.S. consumers.
“This is going to change people’s lives forever,” Desautels said. “You can’t anticipate what all the reasons and uses will be.”
And while the current shakeups on Wall Street may make the wireless industry hold its breath a little longer in anticipation of these advances, many say the pure demand for mobile Internet services will outlast-or even bypass-a slowdown in the economy.
“Consumers continue to be interested in wireless communications of all types,” Desautels said. “The public is still interested and still going to spend on wireless access.”
And on this topic, everyone in the industry agrees.
“The economics (of the mobile Internet) are very good,” Wilson said. The current economic slowdown “doesn’t affect the fundamental value proposition.”
“I think with the mobile Internet we’re right at the inflection point,” IdeaEdge’s Collas said, adding that the industry is poised on the brink of explosion. “This is the right place to be.”
But until that explosion, Desautels said, it will likely be an unpleasant wait for the wireless Internet companies today that are hoping to get an early start.
“These are the brave pioneers in a nascent industry trying to hang on until the market develops-and it’s a tough place to be,” he said.
