The wi-fi phenomenon

As hot spots proliferate along with wi-fi notebooks, mobile computing jumps ahead

Newsweek International, March 17, 2003   

Imagine all the computers in your home or business connected to each other and to the Internet — as well as to your stereo and your television, perhaps — without wires and without any of the hole-drilling, stapling, nailing, gluing or threading that wires require. You can have that now, thanks to Wi-Fi. If that term is new to you, it won’t be unfamiliar for long. Wi-Fi is red hot. Some 3 million to 4 million wireless access points were sold worldwide in 2002, according to Analysys Consulting in Cambridge, England.Coffee, tea or email?You probably take it for granted that when you’re in a coffee shop, you can make a call using your cell phone. Soon, you may take it for granted that when you’re in a public place you can call up a Web site with your laptop or PDA. The technology to thank is Wi-Fi. So-called Wi-Fi hot spots are sprouting all over the place, especially at Starbucks coffee shops. Starbucks Coffee locations are the third place where public Wi-Fi hot spots are proliferating — hotels and airports were first — in concert with wireless provider T-Mobile. Starbucks currently offers Wi-Fi Internet access at 2,100 U.S. locations as well as outlets in London and Berlin. The company plans to broaden that offering in both North America and Europe through this year and next. Turn on your Wi-Fi-equipped computer at Starbucks, and it will find the network and ask if you want to connect. If you’re already a T-Mobile customer, log on. If not, you’ll need your credit card. But you can pay for as little as 15 minutes of connection time, if that’s all you need. From there, you’re plugged in: retrieve your e-mail, check Web sites, all without wires. Finished? Log out. In addition to Starbucks, T-Mobile has deals in place with the Borders books-and-music chain, as well as Delta, American and United Airlines to offer Wi-Fi access in departure lounges. Starbucks does not disclose hard data on how many people are using the service. But “anecdotal feedback indicates it’s popular,” says Anne Saunders of Starbucks Interactive division. “We think that over time it will be a reason for people to come into Starbucks.” That and a cup of coffee, of course.


Wiring the world, it turns out, means getting rid of the wires. The technology making both things possible is Wi-Fi (short for “wireless fidelity”). That’s the 802.11 radio transmission standard. Developed by the Institute of Electrical and Electronic Engineers (IEEE), the 802.11 standard connects devices using radio waves over short distances. There’s 802.11b for wireless local area networks (LANs) using the 2.4GHz frequency spectrum to move data at a very fast 11 Mbps. There’s also 802.11a, which uses the higher 5GHz frequency and runs at a considerably faster 54Mbps, and 802.11g, which uses the lower 2.4GHz frequency but runs at the faster 54Mbps rate.


What all that means, practically speaking, is a very efficient method for connecting computers within a 100-foot radius to each other and to the Internet. Everybody in the same home or office can access each other’s files and the Web — as well as connect to printers or any other networked hardware — without having to drill any holes or run any cable. Each machine needs only a card with an attached antenna and the requisite software, and each location needs only one Wi-Fi access point to connect all the machines to the Internet. Users can configure privacy settings to allow total access to others or no access at all — an important consideration if you’re reading sensitive e-mail at work or poring over confidential business documents in a public place, such as the coffee shop on the corner or the noodle bar down the block.


Wi-Fi’s apparent ubiquity seems instantaneous; its growth and adoption have been sudden. “The last two years, the number of units shipped more than doubled every year,” confirms Sarah Kim, wireless-technology analyst with The Yankee Group. She calls the growth “truly exponential.”


Globally, Wi-Fi as an industry is worth about $2 billion annually, says C. Brian Grimm, communications director with The Wi-Fi Alliance, an international trade association formed in 1999. He expects the market to grow to about $5 billion within three years. In January 2003, Alliance members agreed on an international symbol indicating public Wi-Fi access zones, which they plan to deploy globally.


The Yankee Group’s Kim says that initially, enterprise users drove the adoption of Wi-Fi. Businesses that needed mobile computing and wireless connectivity were the earliest users —factories first, with warehouses and hospitals following.


As sales to the enterprise market started to slow, manufacturers and retailers began targeting households. Broadband subscriptions were proliferating, and many households were buying second and third computers, only to encounter a bottleneck because only one machine in the house was connected to the Internet. Apple offered a Wi-Fi access point for $100, and its competitors had to match that price, pushing the cost of Wi-Fi to levels tempting to home users: typically, about $100 for an access point and $50 for the card that allows another computer to connect to the network — half what enterprise users had been paying only a few months earlier.


Big-name companies in the computer industry, including Microsoft, began selling simple home Wi-Fi systems in time for holiday buying at the end of last year. “As a flagship product, it wasn’t a ‘wow ’em,’” says Kim about Microsoft’s MN-500 wireless base station. “But when Microsoft’s in [a market], it’s big.”


The proliferation of public Wi-Fi hot spots should help propel the technology’s growth (see “Coffee, Tea, or E-Mail?”). T-Mobile, Wayport and Boingo are the main wireless providers racing to establish Wi-Fi access in as many public places as they can. Hotels and airports are promoting their Wi-Fi access. And now AT&T, IBM and Intel have formed Cometa Networks, a venture they hope will put every person in North America within five minutes of a Wi-Fi hot spot.


Analysts see Wi-Fi as one of the few developments that could revive sluggish PC sales. Few consumers are likely to buy a new laptop just to get a little more memory or a slightly faster processor. But a Wi-Fi access card as standard equipment just might persuade a wavering consumer to spend $1,500 or $2,000 for a new system. The Yankee Group’s Kim predicts that by the end of next year [2004], nearly all laptops will come with some form of 802.11b.


While North America is furthest ahead and still leading in Wi-Fi adoption, other regions are gaining. Business travelers expect the same connectivity in Europe that they enjoy at home, so public hot spots are proliferating on that continent, too. And in Asia, public Wi-Fi access is being driven by a couple of factors: in Japan, it’s a demand for cutting-edge technology and anything wireless. In South Korea and some other Pacific Rim nations, public Wi-Fi access is being accelerated by government initiative. Wi-Fi is also spreading beyond the computer. One of the few bright spots at this year’s International Consumer Electronics Show in Las Vegas was the proliferation of Wi-Fi hardware in appliances other than computers. Sonicblue, for example, showed a device that lets people enjoy the digital entertainment stored on their PCs by more traditional means. Sonicblue’s Go-Video D2730 DVD Player can be upgraded with a Wi-Fi card so you can watch or listen to just about anything on your PC’s hard drive through your TV.


William Clark, director of wireless and mobile research at U.S.-based Gartner, points out that unlike previous technological advances, Wi-Fi doesn’t need a killer app to make people want it. “The killer app already exists — it’s the Internet and everything you can do on it. The only thing that’s changed is the pipe you’re connecting through, and now you don’t need to plug anything in physically to do that.”