Services firms tackle Europe for wireless trials
Internet services firms are bulking up their wireless divisions and using Europe as a strategic proving ground before tackling the U.S. market.
Some start-ups are already cutting deals with foreign partners. Agency.com recently won a contract with European retail giant Carphone Warehouse to build a wireless portal for cell phones.
Analysts say other Net services firms already established in Europe, such as Scient, Viant and iXL, will soon be ready to join the wireless boom with services and other options for customers in the United States. Big Five consulting houses and other traditional services firms have also thrown their hats into the collective wireless ring, providing wireless strategy planning and other services.
Jupiter Communications analyst Preston Dodd said the earlier services firms get into the wireless market, the better.
"You learn by doing," Dodd said. "This is an opportunity for these firms to get ahead of a curve that will be a tremendous revenue stream."
Europe has benefited from a unified standard for wireless data transmissions, called GSM, or global system for mobile communications. This standard has helped spread the use of handheld devices and Web-ready mobile phones.
Nowhere is this boom more evident than at CeBit this week in Hannover, Germany. One of the world's largest computer trade shows, CeBit participants are expected to highlight the growing importance of wireless Web access from portable devices and cell phones.
Companies such as Agency.com, Razorfish, Proxicom and USWeb/CKS have launched wireless initiatives in an effort to stake an early claim in the domestic market. Programs include wireless strategy planning and design, so Web portals are able to recognize and communicate with handheld devices.
"(Companies) realized that this stuff is coming quicker in the U.S., much more than expected," Agency.com co-founder Kyle Shannon said. "Companies might miss this idea that the Internet will be everywhere. It's in the grocery store. It's at the ballgame. It's in kiosks, and it's on the phone."
According to market research firm Yankee Group, there will be more than 1 billion mobile phone owners by 2003, and about 60 percent of those phones will be Net-ready.
Razorfish, for example, is an early mover in the wireless market. The company runs a wireless lab in Finland and seven offices in Europe. Razorfish has also partnered with Nokia and Ericsson to deliver wireless-based services to corporate clients in the United States as well as overseas.
Proxicom, which recently teamed with Ericsson's consulting unit to sell wireless applications to corporate clients, said it is currently working on a number of large wireless projects in both Europe and the United States. Last quarter, the company said European revenues increased from 8 to 12 percent and will continue to grow.
"With wireless, we're helping companies get a glimpse into the future," said Bruce Thompson, vice president of strategic development at Proxicom. "It's not a fad. Wireless data has been around for years, but what's new is wireless Internet and that's where we want to be."