EyeForWireless: Market Segmentations
The panel discussion on “market segmentations” for broadband wireless seems to be more focused on challenges for wireless broadband – capital costs, customer acquisition, technology challenges, interference problems and location issues were all discussed with the general feeling that things need to get cheaper – but at the same time, experience is going to matter. Thus, the suggestion is that companies get as much experience now as possible (which explains some of the early implementations of wireless broadband from companies – like Towerstream – that promise to shift to WiMax when it actually exists). The bits about segmentation tends to cover ground that was covered earlier: looking at whether or not it’s focused on “greenfield” applications where there’s little wireline competition or business applications in major markets where they can be served in a better way than via a wireline offering. Everyone seems to agree that the residential market isn’t worth bothering with at this point. The general prediction is that the near future is going to continue to be specific regional coverage with wireless broadband, and eventually may lead to a roll-up into a national play. They kind of brush aside (twice: once in the talk, once in the questions) the issue of potential competition from the wireless carriers offering 3G services – saying it’s not true wireless broadband, but just a data service on top of a voice connection. That may be true to some extent, but the real question is how will customers view it – and whether or not they’ll consider wider area of coverage more important than higher speeds. The wireless carriers are certainly pushing more data applications – and aren’t just focusing on data being an “add on” for voice. If you look at Vodafone and Verizon Wireless’s recent launches, the focus is clearly on data with no voice service yet at all. As for the interplay between WiFi and WiMax, Eric McLaughlin from Intel explains that the integration makes sense with the WiFi basically acting as a local area booster of the wireless signal once it gets into the home. Concerning the “next generation” situation where 802.16e (the mobile, instead of fixed, version of WiMax) is standardized, Intel predicts that it will be ready in early 2005 (with equipment coming out simultaneously), followed soon thereafter with it being built into Intel chips to give the whole “wireless anywhere” situation. Chris Knudsen from Vulcan Capital is being a bit more realistic, pointing out that as much potential there is for the technology, reality has a way of getting in the way of wireless hype – something we agree with strongly. He says that the unexpected challenges and applications may slow down the widespread adoption of the technology. At the same time, of course, that’s where the major opportunity is – in the unexpected applications of wide area high speed bandwidth.