One of the few sleepers in technology today, WiFi could soon grow ubiquitous. Based on normal laptop replacement rates, industry estimates point to 20 – 25 million units alone, not even counting other devices like PDAs, appliances, or phones.
The quick hits are inside homes and offices. But well-publicized rollouts in Starbucks plus the blooming of free public hot spots have publicized the idea of broadband almost anywhere. Well, let’s not get carried away here — cell phones still don’t work away from cities or interstates. Nonetheless, the success of wired broadband in hotels at $10/night has proven that road warriors will buy reasonably priced high-speed access.
Of course, speed bumps await, like crowding or vulnerability to eavesdropping, but most of these problems will be resolved. The major hang up will be financing the build out.
Call us crazy, but we’re hazarding a few predictions:
* Technology: In the short run, WiFi will become a victim of its own success. Emerging alternatives that operate on less congested bands, could resolve bottlenecks. As for security, fixes such as digital signatures and encryption are already here today. Enterprises just have to enforce their use.
* Cost: Although individual hot spots are not that expensive, covering an entire metro area is another story. Existing and emerging technologies might resolve small parts of the problem, but it will cost billions of dollars to reach critical mass coverage. That will dictate a triage approach to build-out: premium, enterprise grade secure services introduced to downtown cores, office parks, hotels, and airports where business users are sitting down with both hands on the keyboard. The truly mobile Internet, strung out on cell towers long the highway, will have to await not just capital, but telematics innovations making the hands-free Internet possible.
* Market Development: Mobile carriers will open the battle, but lose the war. Their business models (private networks, dedicated hardware), technology (circuit-switched), and time charges are precisely the models that Internet users have rejected. (It’s amazing that cell customers still tolerate these 1970s-vintage business practices.)
The ultimate victors will be ISPs/wide area backbone providers (who already own the customer), aligned non-exclusively with third parries (like Cometa) that construct the build-out. There will be two tiers of service: enterprise class, which is secured, with the option of priority bandwidth; and consumer service, which is unsecured, less profitable, competing against piggybacked, informal neighborhood access.
No wonder we recently heard one observer characterize WiFi as “the great mobile carrier bypass.”