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Recent deals sketch future wireless power lines

The axes of power that will shape the business world's wireless Web access are slowly falling into place.

Mobile
The axes of power that will shape the business world's wireless Web access are slowly falling into place.

Mobile phone giant Nokia and Compaq Computer said today that they would join business-focused mobile data infrastructure efforts. In a separate announcement, a group of 10 companies including Intel, Dell Computer, France Telecom, Motorola and others said they have created a new body designed to create standards for the wireless Net.

The agreements, and other recent deals like them, help outline the corporate power blocs that are developing as the wireless industry runs headlong into the traditional computing business.

Companies on both sides see a potentially huge new market, and in it the ability to extend their dominance or create the seeds of a new technology powerhouse. But because each side brings only part of the puzzle, they need each other, at least for now, to create the seeds of a new Cisco Systems or Microsoft.

Already, Motorola and Ericsson have partnered with Cisco to create similar wireless data infrastructure technology. Today, Ericsson and Microsoft announced they have created a joint venture focused on wireless email systems. Qualcomm and Microsoft have long worked together on their Wireless Knowledge business-focused technology but have run into hurdles along the way.

Analysts say these alliances are necessary as formerly separate industries come together to control a new market. But many caution that these lines of power are likely to be fluid for now and won't necessarily coalesce into tomorrow's long-term power blocs.

"I think some of these alliances are held together with a very old rubber band," said Ray Jodoin, a wireless industry analyst with Cahners In-Stat Group. "They're certainly subject to change."

Riding the business wave
The Nokia announcement comes as much of the wireless world, at least in the United States, is beginning to look to business use of wireless Internet services as the match that could light a fire underneath broader consumer use of the wireless Web.

Industry analyst predictions for the adoption of wireless phones and the use of wireless data have been bullish for a year. Some predict that more than 1 billion mobile phones will be in use worldwide by 2002. Other say that by the end of 2003, more people worldwide will connect to the Net using a mobile device than through a personal computer.

But for all of this optimism, adoption rates for the mobile Web in the United States remain slow. Other regions, notably Japan and Scandinavia, have leapt ahead in this regard.

Accurate figures for the number of mobile Web users are still hard to come by. But Sprint recently said that adoption for its service, which has been marketed as much or more than any other wireless mobile service in the United States, had adoption rates "in the low double digits" for new subscribers.

In part because the amount of content available through wireless phones is still slim, and because the interface is difficult to use, wireless providers are turning much of their attention to business customers who might be more likely to use wireless services.

That means more demand and a potentially strong new market for companies that can persuade businesses to set up their wireless infrastructures using their products.

The 10-company Mobile Data Initiative Next Generation will take off from work done by a predecessor group, which focused on data transfer using earlier cellular phone technologies. The new group will work to streamline data standards based on Internet-style technologies, as the carriers upgrade their networks during the next few years.

The deal between Compaq and Nokia will see the two companies work together to develop and market a line of products that merge the computer manufacturer's popular ProLiant server line with the wireless companies line of WAP (wireless applications protocol) servers.

The deal will merge Compaq's hardware with Nokia's software, giving the combined product the ability to serve wireless data pages just as it ordinarily can provide traditional Web pages.

The companies' alliance is limited to this single product line for now, but representatives said it could be extended if it proves successful.

"We'll be exploring other options as they are available," said John DeLisle, director of business development for Compaq's wireless server group.

The timing of the product line's release is still being worked out, but the companies are shooting for a release date this year.

Shifting sands
Some analysts caution that these companies are working inside a technology that is still new enough to be changing radically and still has some hard questions hanging over its future.

WAP technology, which has been widely adopted by carriers around the world, is starting to attract some criticism, particularly in Europe. Moreover, a pending lawsuit over the intellectual property right underlying the technology has raised warning flags in some circles.

In the latest development on that front, Geoworks filed suit against Phone.com and Sanyo, seeking to block the manufacturer from importing phones containing Phone.com's wireless Web browser into the United States. Geoworks alleges that the WAP technology contained in Phone.com's software contains parts of its own proprietary intellectual property.

This kind of dispute could help derail the wide adoption of WAP, the technology underlying the Nokia and Compaq server, some analysts say.

"The Europeans are not to happy with anything that has a lawsuit associated with it," Jodoin said. "With this Geoworks-Phone.com thing, I don't think we've even gone into the third chapter of what happens with that yet."

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