Wireless boom leads firms to swap strategies

A number of firms have shed their original business plan to tap new Internet-driven ideas, a telling sign about the promise of the wireless Web.

3 min read
NEW ORLEANS--Wireless companies are beginning to shed their original business plans in favor of new Internet-driven ideas, the latest sign that the wireless Web is expected to become a hugely lucrative market.

Little-known firms such as Corsair Communications, Xypoint and Metro One Telecommunications, once focused on wireless billing and emergency services, now plan to offer mobile Web content or e-commerce software for cellular phones.

The new strategies, revealed at this week's annual wireless networking industry trade show here, provide evidence that the industry is anxious to make mobile Net services happen--after years of largely hollow promises.

"It has to do with the promise, the hype, the seduction of the wireless Internet," said Jane Zweig, an industry analyst at Herschel Shosteck Associates. "Nobody can afford not to be looking at this market."

Worldwide handset sales already outpace personal computer purchases, and according to many estimates, roughly 1 billion mobile phones--more than half of which will be Internet-ready--will be in use in just a few years.

That huge potential has led technology heavyweights such as Microsoft, Cisco Systems, Sun Microsystems, Intel and IBM, as well as many Internet firms not normally associated with the wireless industry, to this week?s conference armed with new partnerships, products and services.

Smaller firms have also reworked their strategies to tap the growing wireless market. Corsair, a company that focused on preventing wireless fraud--when cellular phone cloning was a large problem--this week announced a new real-time billing system called PhoneFuel. The software allows service providers to instantly update their systems with customers' latest account information.

A new version, expected later this year, will offer a variety of functions to allow customers to do business on the Web.

"In order to do real-time transactions, you have to have real-time billing," said Carla Schneiderman, vice president of marketing, business development and operations for Corsair. "Right now we're at the beginning of the curve. By mid-2001 there's going to be a significant penetration of (Internet-ready) phones, and that's going to drive mobile commerce transactions."

Separately, Xypoint, which develops wireless 911 systems, revealed a new content-delivery service built around its location-based emergency response technology. The WebWirelessNow service allows Net content to be delivered to any digital handset, not just those that are embedded with the highly touted Wireless Application Protocol (WAP) technology.

WAP is a technology that allows a mobile phone owner to access content, like information from a Web page, over a wireless connection.

Internet portal AltaVista today agreed to use the technology, and Xypoint also plans next week to unveil a software developers' kit designed to easily allow Web site administrators to offer wireless content, according to a spokesman.

Xypoint executives originally believed location-based services, such as driving directions and emergency response, would be lucrative markets, but they didn't count on the Net explosion.

 Ken Arneson "In our early business model the Internet wasn't that big," said Xypoint chief executive Ken Arneson. "The thing that really changed is the Internet came on the scene, and it really eclipsed those other services."

Now Arneson expects revenue derived from the company's new Internet services will match all its other revenue by the end of 2001.

"Net products will ultimately be the core of our revenue," he said.

Wireless "411" phone information company Metro One Telecommunications also has Internet plans--potentially, location-based e-commerce, according to sources.

Industry insiders say successful wireless Internet business models are only beginning to emerge, and that now is the time to dive into the market.

"You can't be too narrow. Obviously you want to have a core business, but if you're thinking about larger wireless solutions, then I think you're talking about wireless success," said Mike Houghton, president of wireless consulting firm Communicreate.