Wi-Fi phones don't add up to much

With only 113,000 phones in circulation in 2004, there's room for sales growth, says Infonetics.

A new study suggests it will be a number of years before Wi-Fi phones, supposedly a revolutionary telephone technology, manage to fulfill expectations.

Analysts at Infonetics Research say portable phones using Wi-Fi, the popular technology that creates 300-foot zones of high-speed wireless connectivity, are taking hold in hospitals and businesses, but worldwide sales were negligible last year.

The results are disappointing. After years in development, the much-anticipated devices were supposed to take off in 2004. But with just 113,000 such handsets sold last year, or $45 million in total sales, it's apparent the prognosticators were wrong. Rather, the sales "represent a market at its birth," as Infonetics analysts put it.

Wi-Fi phones combine two very hot and potent technologies--Wi-Fi and voice over Internet Protocol (VoIP) software, which lets Internet connections double as extremely inexpensive phone lines. Typically, VoIP subscribers use a wired phone line, whether a single home phone or any number of phones in an office setting. But many service providers see an opportunity to create wireless versions of their services using Wi-Fi. Introducing the appropriate VoIP services and technology could turn hot spots into giant phone booths.

But it could take at least until 2009 before the cost of Wi-Fi phones drops enough for a mass market breakthrough, according to Infonetics.

"Voice over wireless Internet devices have the potential to be a hugely disruptive technology," Richard Webb, Infonetics directing analyst said a statement. "As VoIP goes wireless, this will present a challenge not only to fixed line operators, but to mobile operators."

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    Ben Charny
    covers Net telephony and the cellular industry.
     

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