Wireless liftoff

PDAs blast free of their cradle launching pads.

TV commercials for wireless products seem a lot like campaign ads: They paint in broad strokes, make outlandish promises, and leave us feeling more confused than enlightened. Take that Nortel commercial showing a woman prompting her colleague with speech lines over a handheld screen: She appears as a flawless live-video image, but that’s a reality several years in the future.

Right now, only 2 percent of the U.S. population–a veritable secret society–uses any kind of wireless device, be it a cell phone, pager, or Palm. The rest of us hear and see only glimpses of what it must be like to be in that club. Has your average person on the street heard of Handspring, AvantGo, or Yada Yada? As I was reading news on a Palm IIIc during the bus ride home from work one day, the woman sitting next to me finally leaned over and said, “Excuse me, but what is that?”

Anybody who has a personal digital assistant (PDA) has heard of Palm and AvantGo. Palm first introduced its Palm Pilot digital organizers in 1996, providing a small, lightweight way to take your day planner, to-do lists, and contacts with you. Many early adopters of these devices quickly became converts. Put the device in its cradle (hooked up to a desktop computer), press the Sync button, and all of your data is updated and ready to go. You can even read and send e-mail this way, although the device depends on syncing with a desktop computer for updates.

In 1999, AvantGo introduced free PDA content channels–Web sites optimized for PDA viewing, usually by removing or minimizing graphics and by choosing a select number of articles to display as text. This gave PDA users many more ways to stay up-to-date while out and about. Now you could use Hollywood.com to look up movie times for your area, or read The New York Times’ daily top stories. AvantGo quickly amassed more than 650 content providers, and grabbed prominent positions on many PDA portal sites.

Last year, companies started offering live wireless Web surfing through services such as OmniSky and GoAmerica. Get a modem for your PDA, sign up with a surfing service, and presto–bye-bye, sync dependence. As the new trend toward always-on wireless service evolves, more and more companies are clamoring to provide the next must-have applications.

Today’s emphasis, everyone agrees, is on figuring out how to take the next step with wireless content–making it more personal, interactive, and live. Providers also want to make money at it, of course. To this end, they’ve discovered that serving consumers may get them press, but serving businesses pays the bills. And it’s a lot easier to develop personalized services for known entities–such as sales reps–from specialized-content repositories on corporate intranets than it is to serve up portal-type experiences embracing the entire Internet.

According to some analysts, these steps will finally start delivering on the real promise of wireless. Many companies promised too much too soon, and consumers last year were let down by Web-enabled phones that didn’t work, or by PDAs that were limited by their wired connections to desktop computers. This had a ripple effect through businesses–the same wireless early adopters are the people to whom providers want to sell business services.

“For the past year, consumers were promised mobility, but those expectations were not met,” says Nicole M. Nicas, senior research associate with the Aberdeen Group in Boston. “One of the reasons [similar ventures in] Japan were so successful was they were promised wireless data–you choose what you want and take it with you. They weren’t promised the wireless Web.”

Wireless data countdown

With the advent of wireless modems and live connectivity for PDAs, wireless companies have realized that in order to take advantage of the mobility of small devices they need to start developing applications that truly differentiate the PDA from a wired-Web connection. Providers will now turn their attentions to providing the wireless user with much more personalized information that is strictly relevant to them, and with information that updates on the fly.

Don’t expect all of this to happen within the year, however. Wireless still faces many hurdles–not the least of which are barely-there wireless networks, competing wireless standards, rival wireless platforms (i.e., will you carry a wireless phone that can access the Internet, or a PDA that can also act as a phone, or something else entirely?), and a general ramping up of wireless knowledge that’s on pace with the continued ramping up of wired Internet use. This is the countdown to wireless liftoff; the market and technologies are young and still wide open. Consequently, we’ll see a lot of new companies stake their claims, and we’ll see a lot of jockeying for strategy, attention, and market share. Palm, whose Palm V models first gained wireless Web access via a Minstrel modem and OmniSky service, quickly wised up to the always-on trend. At the end of 2000, Palm introduced its own wireless access through its MyPalm portal for the Palm VII and VIIx models. Likewise, OmniSky, Yada Yada and other companies jostled to make their wireless services stand out.

Let’s take a look at some of the companies staking a claim on the consumer “live” wireless domain:

Yada Yada, a new mobile Internet portal and wireless ISP that launched in January, touts its proprietary browser software, claiming that it can successfully display almost any Web site, regardless of whether it is optimized for wireless display. It also features up to six POP3 e-mail accounts, instant messaging from MSN and Yahoo!, and a Find-it service that will locate bars, ATMs, restaurants, rest rooms, and other things. The company also will introduce a drag-and-drop folder system to make it easier to manage PDA functions; instant alerts for stock prices, sports scores, and news; and a Universal Sync function that synchronizes all the information on your PDA, cell phone, PC, and pager from any device.

Yada Yada’s modem service, which tunes in to the cellular digital packet data (CDPD) network (accessed through carriers such as AT&T or Verizon) costs $40 per month, although users can access Yada Yada without a modem for free and sync with a desktop computer to update the content.

“We know users won’t sit and browse on a Palm like they do from a wired connection,” says David Behin, director of content for Yada Yada. “The content on a PDA has to be specific–something the user wants and needs to use within the next five to 10 minutes, and then forget about.”

Behin says that because wireless PDAs are still relatively new, he expects the free Yada Yada service to pull people in, get them accustomed to the devices, and make them want to upgrade to the full wireless experience. “Companies are excited about partnering with us because we offer wireless connectivity above and beyond what AvantGo offers, and that’s added value to their customers,” he says. “Hotsync was a great model for educating the consumer about wireless, but the next stage is dynamic content. It’s really taking off right now.”

AvantGo disagrees with Yada Yada’s depiction of its service offerings, maintaining that its content is not simply sync-only and static. “If you’re accessing AvantGo with a modem and you hit an area where the signal goes out, the transaction stays on the device and renews when you’re back in a service area,” says Karen Logsdon, director of corporate communications for AvantGo. “The beauty of AvantGo is that it just works, no matter what the underlying infrastructure is.”

OmniSky’s wireless service, which has been available since May of 2000, is also available on the CDPD network for $30 to $40 per month. Chris Weasler, the company’s senior director of content, says last year’s goal was to develop and deliver deep, broad content to PDA users: The company has partnered with 200 content providers, including AOL, Ameritrade, eBay, and The New York Times.

Weasler says OmniSky’s goals this year are to make content more unique and compelling to mobile users; improve the functionality of the PDA device; and begin offering wireless advertising options to partners through DoubleClick.

To meet the first goal, OmniSky has acquired NomadIQ, a location-based services and robust-messaging platform. When this functionality is rolled out, OmniSky users will be able to make themselves visible to other users or conceal themselves from view. A third option lets you make yourself visible and locatable, so that others know exactly where you are. “It also has IM [instant messaging] functionality built in so people will have a common interface for drawing on a map, for instance, or doodling or playing tic-tac-toe,” Weasler says. Not in an area with wireless service? The new OmniSky service will still allow users to sync with their PCs to acquire local content.

OmniSky’s second objective will focus on optimizing the functionality of the PDA itself, breaking down the walls between the PDA’s built-in organizer functions-date book, calendar, etc.–and wireless services.

“For example, our content partners insert a couple of lines of HTML, which creates a Save button on the interface,” Weasler says. “Say you’re looking at a map and directions-you click Save and dump it into your date book, address book, etc. Or you can do it with a flight itinerary from Travelocity, or a restaurant review.”

OmniSky’s next step will be to initiate more actions from the PDA’s operating system. For example, in pulling up a location for a meeting, your date book could launch Vicinity, a service offered by an OmniSky partner that gives driving directions. Or the PDA menu could list a “book a flight” option that launches a travel service.

The third goal of wireless advertising came directly at the request of OmniSky’s content partners, says Doug Leeds, OmniSky’s director of wireless advertising. “Most of our pure content-play partners aren’t making any money in wireless right now,” he says. “They’re extending their brand and creating loyalty, but they need a single solution that’s easy to use and that creates critical mass most efficiently. This is an attempt to provide that service to our partners.”

The DoubleClick service went live to OmniSky users on selected sites in March. Leeds says there’s been some confusion about whether or not to call it an advertising trial. “It will be fully tested when it launches,” Leeds said in February, “but no one’s done this yet. We’ll be doing lots of research to see what works and what doesn’t, and implementing that into the service.”

Firing up the business thrusters

PDA users who gravitate to free content services such as AvantGo might assume that these companies are focused on providing content for consumers. New York City-based Vindigo , for example, is a free city guide. If you’re visiting a major U.S. city, a PDA enabled with the program will give you directions to many stores or services, including Zagat’s restaurant reviews. Shadowpack, based in the San Francisco Bay area, became popular for its “Dennis Miller Demystified” service, which produced immediate explanations of the comedian’s often obscure references to history and pop culture during “Monday Night Football.”

But AvantGo, Vindigo, and Shadowpack are all set up as so-called “business-play” companies–they actually make money from businesses by licensing their technologies or by providing other services to businesses.

Vindigo partners with and licenses its technology to content producers such as Zagat, OpenTable, and Clubplanet.com. Palm, AvantGo and many others (such as Oracle, Aether, GoAmerica, ThinAir Apps, Virage, etc.) may enable a company to extend intranet and e-mail access to mobile employees.

Other, more vertical applications are developed every day. Palm, for example, provides Famous Footwear with wireless handhelds that scan and update price information in real time. For the U.S. Postal Service, Palm provides wireless scanners that help agents file incident reports on missing or mishandled mail. AvantGo has provided U.S. Senate Republicans with access to policy papers, daily agendas, press deployments, and more from their mobile devices. It also has partnered with Research In Motion (RIM), maker of the Blackberry handheld e-mail device, and Ford Motor Co. to extend intranet services and other capabilities to corporate employees.

These providers say they use their free consumer-side services as a permanent beta test and as a way to establish credibility and brand loyalty with consumers. “Our service to individual users is one of the best marketing tools for the enterprise,” says Michael Aufricht, general manager of AvantGo Mobile Internet. “It puts a public face on us. Our customers want to get their content in front of a lot of eyeballs, and we do that better than anybody–we serve more than two million users.”

Most analysts say this is a winning business model for U.S. mobile culture–which, unlike Japan’s, is primarily business-driven. But while enterprise is important, everybody thinks it’s also critical to get your name out to consumers, either directly or through your partners.

“Those who’ll be most successful will make inroads into the enterprise, but you need both mind share and installed base,” says Kevin Burden, manager of the Smart Handheld Devices program for IDC, a tech-industry analysis firm based in Framingham, Mass. “Look at RIM, for example. They sell only into the enterprise and they are successful, but they have nowhere near the installed base of Palm.”

Business profits taking off

Now that the Y2K scare is over, businesses are investing heavily in wireless, says Joe Korb, president of GoAmerica, a wireless e-mail and Web services company based in Hackensack, N.J. Korb says that consumers are still willing to pay a lot for wireless services, but businesses that test out wireless tend to buy even more accounts. “If you’re strictly on the consumer side, you have a high [customer turnover] rate and price erosion,” he says. “From where we are, we’ll eventually expand our market to consumers. The wireless model will follow the same trajectory as the cell phone … it will seamlessly move from pure business to a mix of business and personal.”

Businesses that provide enterprise services (and even those that don’t) say businesses are clamoring for help in going wireless. Most analysts counsel such companies to move slowly, because that’s the way wireless will evolve. “Wireless strategy is the term du jour,” says William Hopkins, CEO and founder of the Knowledge Capital Group, a high-tech strategic advisory firm based in Austin, Texas. “Eighteen months ago it was your ASP [application service provider] strategy. Neither of those is a strategy. You need to have a solid plan for integrating and exploiting your business, your products and services, etc. Wireless is not an end unto itself. It’s another communication channel.”

Content-based companies in particular may wonder if adding wireless to their mix is a worthwhile investment. Now that so many have gotten their names out there through AvantGo, will that increased profile and traffic translate into advertising revenue?

OmniSky’s trial with DoubleClick is a bid to prove that it will. “A problem for wireless advertising is that even a run of network–ads placed anywhere on the network and not targeted to certain groups–didn’t create enough impressions to be worthwhile,” says OmniSky’s Leeds. A run of category, he explained–running ads only on only travel sites or financial sites, for example–is more targeted and thus more valuable for advertisers. “The whole motivation for this is to have enough content to be worthwhile to sell to advertisers,” he says. “We speak in hundreds of thousands or even millions of impressions.”

WindWire is another company doing wireless advertising; it has sold tickets wirelessly for the Carolina Hurricanes hockey team, for example. Salon.com has also teamed up with WindWire to serve ads. WindWire recently completed a trial that garnered click-through and call-through rates of up to 15 percent. “We’re helping publishers see that this is an immediate revenue stream for them,” says Bill Purser, senior manager of marketing for WindWire.

OmniSky’s Leeds is optimistic about the adoption of wireless ad standards that will require ads to be displayed only to customers who request them. He and analysts also think small companies will soon be able to capitalize on location-based wireless advertising in ways that are impossible on the wired Web. But he cautioned that pure-content companies getting into wireless should probably expect wireless technology to cost more than they can make up in ads. “I don’t think ads will ever fully support content on a wireless device, but other things combined with advertising will, like branding and driving people into the site or into your store,” Leeds says. “You have to look at those other benefits of a wireless site.”

2001–launch or letdown?

As valuable as your PDA and the content on it may become with live wireless access, you won’t be able to take it everywhere and count on a live connection for at least another three to 10 years. Look at a map of the regions covered by the CDPD wireless network on the OmniSky site, for example, and you’ll notice that service is clustered in major cities, with many states and most rural areas left without any coverage.

“Right now people are focusing on delivering content to a wireless device, but the assumption that this device is always connected is a problem,” says Barney Dewey, an analyst with the Andrew Seybold Group, based in Boulder Creek, Calif. “None of the networks in the United States is persistently connected right now. I don’t see those wireless networks in place for a decade or more.”

Yes, Verizon and other companies have been buying up wireless spectrum, but more coverage will take time. Analog or circuit-switched networks must convert to digital (packet-switched) networks. Coverage must be extended to outlying areas. Data speeds will ramp up from current 2G standards (maximum throughput of about 9.6Kbps) to 2.5G (speeds of up to 100Kbps) and finally 3G (speeds of up to 2Mbps). 3G capability in the United States is not expected until at least 2003. Competition among wireless standards ( WAP, CDMA, TDMA, GSM, PDC) will also ensure that the United States remains about two years behind Japan and Europe in wireless adoption.

Will companies, syncing devices, or technologies go away in the brave new wireless world? Some analysts say syncing will disappear; others say there will always be a need for offline access. Some analysts speculate that pagers might disappear, but most only shy away from sure predictions.

Lance Schneier, founder and chairman of Shadowpack, views himself as an Everyman technology consumer. He has four PDAs and three wireless phones on which to demonstrate Shadowpack. But he always carries a Motorola digital phone 8160, a RIM two-way pager for e-mail and Internet access, and a Compaq Ipaq with wireless card and Shadowpack.

“On the weekends, when I’m running to the store, I have the first two devices on me, and with those I have voice, data, and e-mail,” Schneier says. “I think people discount devices in the hope that there will be one killer device, but you know, it depends on the user, and they like to have options. When it’s sunny, I like to take the convertible. If I have hauling to do, I take the Range Rover. If you’ve got your jeans on and you’re going to be riding your bike, do you want to try to cram a PDA into your pocket?”

Only you can tell.

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