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.

Ben Charny Staff Writer, CNET News.com
Ben Charny
covers Net telephony and the cellular industry.
Ben Charny
2 min read
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.

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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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