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Wireless Net access niche heats up

The week sees an unusual amount of activity in the wireless area, with announcements from Palm, Sony, Microsoft, Motorola and Symbian, all centered on delivering wireless access and services to users as soon as possible.

The third day of the giant CeBit technology trade show brought yet more wireless news, with Ericsson announcing a cavalcade of new devices and services aimed at the burgeoning market.

Swedish phone maker Ericsson showed off a range of new cell phones and accessories, including new modules which can add wireless connectivity to regular household appliances and industrial machinery. Along those lines, rival European phone maker Nokia announced it is working to bring wireless technology to cars.

The announcements reflect see related story: Microsoft's call for wirelessthe growing interest in accessing the Internet from mobile devices anywhere, rather than typical desktop computers with dial-up Internet connections. This week has seen an unusual amount of activity in the wireless area, with announcements from Palm, Sony, Microsoft, Motorola and Symbian, all centered on delivering wireless access and services to users as soon as possible.

Lending credibility to the trend, investment bank Lehman Brothers today raised its estimate of wireless data penetration from 25 percent of U.S. cell-phone subscribers to 50 percent by 2007. At the same time, the firm upgraded Sprint PCS and downgraded Nextel, among other wireless carriers it follows.

"Our meetings with equipment vendors on a recent field trip have further fueled our enthusiasm for wireless data," the report from analysts John Bensche and Jennifer Cooke said. "Generally, we see faster penetration, deeper overall penetration...by 2007 we are predicting that 18 percent of cellular revenue and 21 percent of PCS revenue will come from wireless data."

At CeBit, taking place in Hannover, Germany, Ericsson demonstrated its four new wireless modules, which are designed to function like a mobile phone but can be built into other equipment, according to the company. Capable of handling voice and data, the modules are intended to be integrated into machines and appliances much like microchips and processors are built into all sorts of devices today.

"The routine integration of a wireless module into a wide range of manufactured products is already beginning and will soon be taken for granted, much as the integration of the microchip is today," Jahn Ahrenbring, vice president of marketing for Ericsson, said in a statement from the show.

Ericsson unveiled its cordless Screen Phone HS210, a new device featuring Bluetooth wireless communication technology, Internet and email access. The device, which runs on the Linux operating system, features a color touch screen and speakerphone and is intended as the centerpiece of a digitally networked home, the company said.

The company also showed off accessories for its phones, including MP3 digital music players, hands-free attachments and a miniature keyboard, called the Chatboard. These devices, along with some concept prototypes including a smartcard reader and camera attachments, are the company's latest move to integrate all manner of digital consumer technology into its phones.

Finnish telecom equipment maker Nokia forecast that all new cars would by the end of 2005 have at least one Internet address and said it aimed to be the No. 1 supplier of such equipment.

It said in a statement it would launch its first wireless vehicle communications equipment--called the telematics system--in the second half of this year, and second-generation equipment would be launched in late 2001.

Lehman Brothers also predicted that the number of data-ready cell phone handsets would grow from more than 423 million this year to 553 million in 2001, reiterating its positive ratings on Ericsson, Motorola, Nokia, Qualcomm, Comverse Technology, and Nortel Networks.

"We believe that Nokia, Ericsson, and Motorola, as well as Asian vendors such as Samsung and Panasonic are all well positioned to exploit this burgeoning market," the report said. "In addition, exponential growth in wireless data should support dynamic growth for a new wave of software platforms, applications, IP gateways, location-based services and wireless modems."

Reuters contributed to this report.