Wireless Systems Design

Wi-Fi Usage Affects Both Bluetooth And 3G

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Remember hearing talk of the so-called "battle" between Bluetooth and Wi-Fi for control of all wireless kind? This much-touted struggle between the wireless-PAN (WPAN) and wireless-LAN (WLAN) worlds has fizzled into nothing. Bluetooth is finally gaining traction in the WPAN market, while IEEE 802.11b (Wi-Fi) rules supreme in the WLAN domain.

A far more realistic struggle is occurring between the WLAN and wireless-WAN (WWAN) space—i.e., between Wi-Fi and 3G cellular systems. By using the word "struggle" as opposed to "battle," I'm trying to emphasize the evolving nature of this convergence between two very different market segments. Indeed, the convergence of the WLAN and WWAN communities will take years to resolve. Yet this conflict does have one thing in common with the Bluetooth-versus-Wi-Fi struggle: It is less about technology and more about usage models and revenues.

Both the Wi-Fi and cellular-3G technologies represent a fundamental change in user behavior. For the last year or so, the telecom industry's WWAN savior—known as 3G—has been losing its luster. Many carriers, especially in the United States, are struggling to convince customers to pay for 3G handsets and infrastructure. The escalating growth and shrinking cost of Wi-Fi makes this argument even more difficult.

Many 3G proponents insist that it's unfair to compare the third-generation and Wi-Fi data markets. They argue that the cellular networks are globally accessible, whereas Wi-Fi is confined to "hot spots." More importantly, they insist that each technology satisfies a different usage model. While these arguments may be correct, the latter is double-edged. It begs an answer to an even more fundamental question: What usage model does 3G satisfy?

It's easy for laptop and PDA users, for instance, to appreciate the value of a high-data-rate broadband-Internet connection while they're in airports, coffee shops, and other public locations. However, it's much more difficult for cellular handset users to appreciate the need for medium-speed broadband connections when they're truly "on the move." After all, do handset users really want to watch streaming video on small displays while driving across town or walking down the street?

Usage models are based on forms of behavior. To many consumers, the cell phone is still an extension of the traditional POTS phone. Voice and the display of textual information (e.g., SMS, e-mail, and simple games) remain the primary attributes of today's cell phones. Conversely, laptops and PDAs are seen as extensions of the desktop PC and associated high-speed applications, like Internet browsing and streaming video.

Usage models, when correctly interpreted and acted upon, can lead to successful products. The lack of a compelling 3G usage model has indirectly given a boost to Wi-Fi. This observation has been supported by several recent studies, including one from the research firm ARCchart. It suggests that Wi-Fi could consume 3G revenues by as much as 64% over the next four years.

This message has not been lost on the telecom community, which has recently partnered with a few major chip vendors to form a consortium. The first tangible result of this gathering was the recent announcement of Cometa Networks (www.cometanetworks.com). It was formed by IBM, Intel, 3i, and AT&T. Cometa Networks will provide the hardware and back-end connectivity for a nationwide collection of publicly accessible Wi-Fi "hot spots." The idea behind the consortium is to provide mobile professionals and Web surfers with a unified way to reach the Internet from a range of hot spots. Such a plan would also give these major players a way to gather revenue from both the WLAN and 3G market segments.

Which one of these technologies will gain the most market share? At the moment, many U.S. observers are betting on Wi-Fi. Does this mean that Wi-Fi is the better technology? Not necessarily. Think back to similar past battles, like ATM and Ethernet or Beta and VHS. This is the classic tale of a current technology (Wi-Fi) beating out the "cool" but unclear next-generation technology.

Will the massive tide of 802.11 development and products be enough to truly change the shape of 3G? If you want to hear what the Wi-Fi and 3G experts are saying, you'd best attend this year's panel at the Wireless Systems Design Conference & Expo. It is titled, "Will WLAN Technology Burst The 3G Bubble?" This panel is scheduled for February 26 from 3:00 to 4:00 p.m. at the San Jose Convention Center in San Jose, CA (www.wsdexpo.com). I'll plan to see you there!

TAGS: Components
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