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Studies look at wireless future

Three different studies are released on the future of wireless, with one suggesting the number of U.S. wireless Web customers will leap from 4.1 million in 2000 to 96 million in 2005.

It's 2005, and next-generation 3G wireless technology still hasn't made it to the United States, cell phone customers are getting swamped by advertisements masquerading as trivia games, and the number of operating systems for mobile devices has ballooned past 50.

This is the wireless world of the future presented by three different studies released Tuesday, with one study suggesting the number of U.S. wireless Web customers will increase from 4.1 million in 2000 to 96 million in 2005.

The studies are yet another indictment of the progress toward "3G," the elusive technology that has long promised to deliver high-speed data rates to mobile devices but has yet to make a showing. Telecom providers are spending hundreds of billions of dollars to build a 3G infrastructure. Yet, there is just one 3G service out now, in South Korea. NTT DoCoMo is expected to unveil its own next-generation service in June.

"The more outlandish hopes of 3G advocates are largely unfounded," a team of Jupiter Research analysts, headed by analyst Seamus McAteer, said in a report.

Instead of super-fast connections, the studies point to a radically different future for a successful wireless industry, one in which things like low-tech games or downloading ring tones are offered over a lower bandwidth network.

The reason? The technology can't support a lofty 3G future in which a movie theater would stream movie trailers onto the handhelds of patrons waiting on a ticket line, Jupiter argues. Most industry experts say that to do so, it'll take a network capable of delivering 2 million bits of information every second, which would be an expensive service to offer.

But, as some European telecommunications companies are doing now, the network that survives will offer a wireless network about a tenth as fast, meaning the world will miss out on watching movies over a handheld.

"Mass market video conferencing has remained a pipe dream since the first videophones were showcased at the World's Fair in 1960," the Jupiter report states.

Many analysts say what is really needed is a single standard type of software for all mobile systems. But don't count on that happening, according to projections by market research firm Alexander Resources. Instead of the four software packages now vying for domination of the wireless Web, there could be more than 50.

"This extraordinarily large number of choices could greatly complicate and forestall introduction and market acceptance of 3G wireless in the U.S.," Alexander Resources said.

Jupiter also says the future will be more about "packets," the NTT DoCoMo practice of charging for each piece of information sent to a phone or handheld rather than most carriers' practice of charging the time spent on the line.

Location-based services, a nascent industry that lets providers deliver information to individuals at specific locations, will also play heavily in the future. Jupiter believes it'll be a standard service for nearly all the world's providers by 2002.

A study released Tuesday by Web marketing company SkyGo found that some types of wireless Web advertising works better than what has been traditionally used on the wired Web, Chief Executive Daren Tsui said.

To conduct the study, SkyGo outfitted 1,000 residents in Colorado with a cell phone and service. Local and national businesses paid to have advertisements sent to the users.

Tsui said the company found that for every 100 ads sent to a single device, there were about three purchases. The same ratio for the wired Web is less than one.

Ads that featured trivia questions worked the best. One ad, for example, was from a local Kinko's and asked users to guess how the company got its name. Participants who guessed right got a coupon for free service. More than half of the 1,000 played the trivia game. The same "click thru" rate on the wired Web is 0.7 percent.

An advertisement that contains a poll, with the same promise of a free item for participation, got a 40 percent click through rate, the survey found.