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Wi-Fi and 3G may come together

New wireless networking chips for handheld devices are giving second life to 802.11b and could test whether Wi-Fi and cellular data services can cooperate rather than compete.

New wireless networking chips for handheld devices are giving second life to the 802.11b standard and could soon test the theory that Wi-Fi and cellular data services can work hand in hand rather than compete.

As previously reported, chipmakers Broadcom and Royal Philips Electronics have developed new Wi-Fi chips that will speed up the use of wireless networking on high-profile portable devices, including cell phones. Broadcom and Philips Semiconductor, a division of Royal Philips Electronics, on Monday announced the new chips--smaller, cheaper and more power-efficient versions of their current 802.11b products.

The chips create new and highly promising uses for the 802.11b standard, which is being eclipsed on PCs by the faster 802.11g, opening the door for devices that combine Wi-Fi and next-generation cellular capabilities.

"Wi-Fi has been aimed at notebooks and infrastructure, but it needs to go far beyond that to reach its full potential," said Jeff Abramowitz, a senior director of marketing at Broadcom.

The new chips overcome some of the key obstacles in integrating Wi-Fi on portable devices and help to encourage the latest theory in the wireless industry that Wi-Fi can be a complement to next-generation cellular networks. The move to integrate the two technologies is relatively new and will likely be a gradual process. But having hardware available that can support both Wi-Fi and cellular networks is a significant step.

Learning to get along
Combining the two technologies on a single device is expected to be a winning strategy, some analysts believe, because of the strengths and weaknesses of both. Wi-Fi delivers large amounts of bandwidth over short range, while cellular data networks deliver relatively small amounts of bandwidth over a wide range. As a result, each can compensate for the shortcomings of the other.

Adding a cellular complement to Wi-Fi allows service providers to fill in coverage gaps, which are expected to be significant for years to come. Wi-Fi providers such as Cometa Networks and Wayport are racing to build national networks, but even if they fulfill promises of delivering access within most major U.S. cities, their metro coverage is likely to remain spotty.


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Next-generation cellular, or 3G, data services suffer from different problems: underwhelming connection speeds and limited use by customers. Adding a Wi-Fi component would help solve the bandwidth problem, at least in highly trafficked "hot spots," which in turn could get consumers used to the concept of mobile data services and boost demand for them.

"This will be one of the first opportunities to test whether Wi-Fi can be a complementary solution or a substitution (to cellular) at least from the perspective of hardware makers," said Ross Seymore, equity analyst with investment bank Deutsche Bank.

Broadcom and Philips have given chip samples to key product manufacturers and estimate that pricing will be $12 to $13 in 10,000-unit quantities, putting them in the same price range as currently available chips. The new chips are up to 80 percent smaller than current ones, such as Intel's Centrino, according to the companies. The chipmakers plan to produce large quantities of the new chips sometime between the end of the year and the first quarter of next year.

Broadcom's new Airforce One Chip combines the three main components of Wi-Fi processors--the MAC, baseband and radio--onto one chip, resulting in a smaller and cheaper product. The company said it also has improved the internal power management features of the chip--the chips consume 6 milliwatts (mW) in standby mode, so it is up to 80 percent more efficient than previous Broadcom Wi-Fi products.

Philips' product is not a single chip, but it is smaller and will consume less power than previous 802.11b chips, about 3mW in standby mode, according to the company. The company is expected to introduce a smaller 802.11b chip in the first quarter of next year, according to those familiar with the company's plans.

Analysts said the introduction of these new chip products from Broadcom and Philips revitalizes the 802.11b standard and may even give it a brighter future because of the popular products, such as cell phones and digital cameras, the chips would be used in.

"802.11b is not in any danger of dying," said Will Strauss, analyst with research firm Forward Concepts. "It just changed venues and perhaps (moved to) one with an even larger marquee."

New life for an old standard
About 18.2 million devices based on the 802.11b standard are expected to ship in 2004, according to Forward Concepts, and that number is expected to jump to 31.9 million in 2005 and 44.3 million in 2006. The boost was largely anticipated because of the integration of Wi-Fi technology into cell phones, according to Strauss.

"We had expected the cellular transition in late 2004, but it looks like it will be early 2004 instead," he said, adding that the firm would update its shipment forecasts.

John Yunker, an analyst with Pyramid Research, agreed, saying that the integration of Wi-Fi technology into cell phones as a result of these smaller, more affordable and power-efficient chips should happen faster than he once thought.

Broadcom and Philips have focused on 802.11b as the standard to implement in portable devices, as opposed to 802.11g, because it hits the right performance levels at the best price points, according to Julie Tipton, a product line manager with Philips Semiconductor. Chips based on the 802.11g standard are more expensive than 802.11b chips.

The relatively high power consumption and large size of 80211b chips has been a challenge, however. Analysts had speculated that smaller, low-power versions of these chips would be suitable for popular portable devices and, hence, attractive to chipmakers and product manufacturers.

Wi-Fi technology has been around for nearly two decades, but only in the last several years have falling prices and drastically improved ease of use led to a tremendous rise in its popularity and brightened prospects for its future. Market research firm Pyramid Research estimates the number of people using Wi-Fi will grow from 12 million in 2003 to 707 million by 2008.

The race is on
Hot spots, or public areas where broadband Internet access through Wi-Fi networks is available, don't have the wide coverage of next-generation cellular networks, but they do offer higher speeds--up to 11mbps for networks using 802.11b--in concentrated areas. Cellular networks offer wider coverage but lower speed connections--up to 144kbps for networks that use 1xRTT technology. The two could be complementary in the sense that carriers could offer high-speed wireless access when a subscriber is near a Wi-Fi hot spot and slower access, but over a wider range, using cellular technology.

For example, in a city a subscriber could have high-speed access when near a coffee shop, but once she left the coverage area she would be switched over to a cellular connection.

Some wireless carriers have already introduced hot spot services. T-Mobile USA has been the most aggressive and has about 2,000 hot spots, the most in the United States. Recently AT&T Wireless, Verizon Wireless and Sprint PCS have started or at least announced plans to enter the market by the end of the year.

Others are also racing to build national Wi-Fi networks. Cometa, a joint venture backed by Intel, IBM and Cisco Systems, has promised to create a network of 20,000 hot spots, signing deals with partners including McDonald's and Tully's Coffee to host its sites. Meanwhile, rival Wayport is seeking to aggregate hot spots from numerous providers to offer subscribers a national U.S. Wi-Fi network. But experts predict coverage will remain spotty for years.

On the cellular side, carriers have invested billions of dollars into next-generation networks that feature data services capable of supporting such activities as Web surfing and remote e-mail access. But data services are not generating large amounts of revenue yet, leading carriers to focus instead on voice services, which have demonstrated the strongest demand.

That may change in the coming months, however, as carriers seek to get a full return out of their hefty investments on creating a high-speed wireless data network.

"Data is not a cash cow yet, everything is still focused on voice, but the original intent of next-generation networks was to drive revenue through more data use," Yunker said.