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TECHNOLOGY BREAKDOWN: Dispatches From The Wireless World – Part 2

By Russell de Pina

(August 24, 2006)

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In my last installment, I did a review of some recently released next generation wireless devices. What we are seeing in the device world is another level of convergence as the media and digital worlds have not only collided, but are have gone mobile.

One of the trends fueling the movement of content to wireless platforms is the emergence of cheap or free broadband connections that are springing up all over the country. Last week, in Mountain View, CA, Google went live with a free municipal wireless networking service.

According to user reports, the Google-Fi network has some problems to sort out, particularly, performance, but on the other hand, it's free.

What the Google-Fi network is a good example of though, is how business models have changed in the wake of the Internet boom. For instance, Google primarily makes their money through advertising. By offering a free municipal wireless service, Google has opened up yet another revenue stream for its ad based online offerings. Another interesting thing about the new wireless boom is that while handsets (phones) still play an important rol in the overall health of the market, mostly because of the high level of integration of internet and media technologies found in today's handsets.

On the applications side, many companies are still trying to figure out how to get advertising to mobiles in such a way that users will actually use it. One strategy is to provide location based services through a mobile device. Earlier, I reviewed Google Maps for Mobile as a good example of a location based mobile phone application. Currently, the most promising strategy is once again, user generated content. Today, we are seeing explosive growth in the user-generated content niche. Of course, when we mention user generated content, the discussion inevitably goes to YouTube. However, other companies are making similar plays, which will lead inexorably to another market shakeout.

For example, on Tuesday (August 22, 2006) Sony Pictures Entertainment announced that it purchased the video sharing site, Grouper for $65 million. With Grouper ranked #8 on the list of video sharing sites, Sony didn't buy Grouper because it was an online video powerhouse. Rather, Sony bought Grouper because it needs a music store a la iTunes. Grouper users tend to be youngerand are more recpetive to buying things online, although if you look at the success of eBay, (which also pulled off its own wireless profit strategy with the purchase of the online phone bureau, Skype) you will find that there are significant numbers from older demographics that have lost their fear of flying and buying online.

As municipal wireless broadband becomes ubiquitous, and cheap (if not free) bandwidth because available, and after the bidding is completed to sort out who will be offering on-airplane wireless service, we should see change another significant round of merger and acquisition activity, as companies position strategies to leverage the advances in both device and network technology.

Russell de Pina is a Principal for n2active, a technology consulting firm located in Houston, TX and Long Beach, CA. Russell can be reached by email at rdepina@n2active.com

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