Online brokerages Suretrade and Quick & Reilly plan to offer trading over wireless devices as early as next week, joining an elite group of e-tailers and brokerages that are positioning themselves in anticipation of widespread wireless Internet access.
Both online discount brokers, subsidiaries of FleetBoston Financial, will offer wireless trading services in three ways: through Palm Computing's Palm III, V, and VII devices; over cellular phones with Internet capability; and via pagers manufactured by Research in Motion (RIM).
Suretrade's wireless service will be available as early as next Wednesday, according to Eric Sterner, the company's director of new business development. Quick & Reilly's service will follow soon after, Sterner said.
The move comes as all things wireless become part of many technology firms' marketing plans. Analysts say that a wireless link to stock brokers could someday be considered an essential service, as the explosion in online trading continues. The move to add wireless service is simply a placeholder in case wireless Web access really takes off.
"(Wireless trading) is the kind of thing that pleases a small segment of the client base very much right now, and it might even help companies differentiate themselves," said Rob Sterling, an analyst at research firm Jupiter Communications. "But long-term, it is likely to be very important because it will be expected by customers."
There were 220 million digital wireless phone subscribers worldwide in 1998 and 150 million Internet users, a Yankee Group study estimates. In about four years, there will be more than half a billion Internet accounts and roughly 1 billion digital wireless phone subscriptions. Internet-enabled "smart phones" are expected to have 48 million users worldwide by 2002 and 204 million by 2005, the research firm reported.
During the past six months, several leading online brokerages have either announced plans to offer wireless trading or have begun the service. Last year, Morgan Stanley Dean Witter's Discover Brokerage and DLJ Direct became one of the few to allow wireless trading. Ameritrade followed soon after linking up with the Sprint PCS network.
Suretrade and Quick & Reilly were ranked as the 10th and 15th largest online brokers, respectively, according to investment bank U.S. Bancorp Piper Jaffray. Schwab, E*Trade and TD Waterhouse are ranked No. 1, 2 and 3.
Offering wireless services is not expected to bump Suretrade and Quick & Reilly higher on the ladder, analysts said.
Jason Lind, a research analyst at U.S. Bancorp Piper Jaffray, said that after DLJ Direct and Ameritrade introduced wireless services last fall, the growth in customer acquisition was hardly noticeable.
The top three online brokerages also said they have plans to offer wireless trading. Schwab said it is currently testing a service and plans to open it to clients in about six weeks. TD said it will allow trading over wireless devices sometime in the second calendar quarter, while E*Trade would not specify when it plans to offer such a service.
Suretrade and Quick & Reilly are using an infrastructure provided by privately held w-Trade Technologies, a company that helps bring e-tailers as well as online banks and brokerages onto the airwaves. W-Trade said its technologies do not rely on any particular wireless network or device.
"Suretrade will store all client information," said Sterner, underscoring that w-Trade will not have information on Suretrade clients. "The information will be fully encrypted."
Suretrade added that it will add services for additional devices if there is demand.
"The online channels are growing by leaps and bounds, but we are still trailing in the wireless department as much as the technology and sector are rocking," Lind said. "Do I think it's going to take off eventually? Of course I do, but we are far off from that kind of adoption."