Is A Wi-Fi Bubble Building?

[Janak Parekh]

<div class='os_post_top_link'><a href='http://businessweek.com/technology/content/may2003/tc20030522_7618_tc119.htm' target='_blank'>http://businessweek.com/technology/..._7618_tc119.htm</a><br /><br /></div>Here's an interesting article on the realities of Wi-Fi, especially startups that are embracing the technology as a core sale product (such as hotspots). You and I may be rooting for the technology, but has profit models been established yet at the mass quantities needed for a real success as a public network?<br /><br />"...more and more analysts worry that euphoria over the one segment that has shown some life during the most prolonged tech downturn in recent memory could lead to overexpansion and an imbalance of supply vs. demand -- creating the type of capacity surplus that has shattered the telecom-equipment business over the past three years. One of the biggest worriers is Andrew Cole, an analyst with wireless consultancy Adventis in Boston. 'Wi-Fi is overrated and headed for a fall,' he declares.<br /><br />The situation isn't that simple. Wi-Fi is really two markets -- one consumer, the other corporate. And at the moment, they seem to be headed for divergent paths -- one difficult, the other more promising."

[achille]

[Janak Parekh]

achille, some good points and I've edited my post slightly -- the article calls into question whether or not new startups will survive peddling the technology, more than anything else. Wi-Fi as communication hardware is well-entrenched, well-productized, etc.

Oh, and please don't assume I necessarily agree with the article's premise. However, I do think the proliferation of "hotspots" will not succeed unless a new fee/roaming structure is put in place. People aren't going to subscribe to 10 different hotspots. I think there is a danger in those ventures if not done properly.

[mscdex]

Oh, and please don't assume I necessarily agree with the article's premise. However, I do think the proliferation of "hotspots" will not succeed unless a new fee/roaming structure is put in place. People aren't going to subscribe to 10 different hotspots. I think there is a danger in those ventures if not done properly.

Not to mention reasonably or much more affordable priced wifi hotspot internet access.

[rubberdemon]

It may not be an entirely bad thing if there is a wifi bubble. The railway bubble of the late 19th century in the US created a huge network of rail lines that could then be purchased cheaply once most of the builders went out of business and the resulting low-cost continental rail service created whole new markets like the Sears catalogue...

Sooo, if there is a big overbuild, a collapse and someone savvy picks up all the capacity cheaply, a widespread and inexpensive service could result. Of course I wouldn't want to work for any of the companies on the losing side of the equation...

[wirelessgeek]

It's an interesting article imho. People should not react as if it's an anti wifi article?. The article is related to companies who work in this hyped wifi market with tough competition, low margins, falling prices (good for consumers) and finding good business hotspot model(s). A lot of people still see 802.11/wifi as the one-size-fits-all-technology which it's not: WiFi is still high power and not mobile just to name something. Products and applications are developed where WiFi isn't/wasn't developed for in the first place and where other technologies are more interesting. This happens in a hyped market where WiFi seems to be the golden word!?

There will be more acquirings and a big shakeout is not to stop imho. But this could turn out to be a positive thing for consumers overtime....

jmho

[rlobrecht]

Sooo, if there is a big overbuild, a collapse and someone savvy picks up all the capacity cheaply, a widespread and inexpensive service could result. Of course I wouldn't want to work for any of the companies on the losing side of the equation...

People predicted this after Metricom went bankrupt, but the Richochet network is still only active in a handful of markets, compared to what it was.

[bdegroodt]

Like you have to be some sort of pundit to announce this. It's a formula for journalists.

Recipe:

1-Hot up and coming product/service/technology
1-Dash of pessimism
Flavor to taste with examples of failures
Serve hot

I could write the same thing today about MEMS, hybrid automobiles, and if the cure for cancer came out tomorrow, I bet I could open up the fish wrap in the morning and find some "journalist" with an opinion about the failure of such a cure.

Of course consolidation and failures will happen. It happens in every market. But while some are failing, there are a heap of others making a mint on WiFi right now and from what I can tell, the foreseeable future.

Now, about this revised 802.11G spec. What the :?: :evil:

[Kevin Daly]

Like you have to be some sort of pundit to announce this. It's a formula for journalists.

Recipe:

1-Hot up and coming product/service/technology
1-Dash of pessimism
Flavor to taste with examples of failures
Serve hot

I could write the same thing today about MEMS, hybrid automobiles, and if the cure for cancer came out tomorrow, I bet I could open up the fish wrap in the morning and find some "journalist" with an opinion about the failure of such a cure.

Of course consolidation and failures will happen. It happens in every market. But while some are failing, there are a heap of others making a mint on WiFi right now and from what I can tell, the foreseeable future.


The problem of course is that a growing chorus of journalistic "there'll be tears before bedtime" exercises can lead to an anti-bubble, such as we currently have in relation to the Internet (where investors assume that all online ventures are bad investments).
Those groups who have something to gain from seeing WiFi not succeed (such as, arguably, telcos. And possibly people who don't like coffee) will naturally seize on anything that lets them spread FUD among potential users and investors and make sure it is brought to as wide an audience as possible (they would be stupid not to...actually in the case of the Internet this has worked well for large corporate employers as well, because they can basically say to their employees "There is no escape. Mwahahahaha!!!") 0X

[Kaber]

It'd be nice to hear someone chime in about the WiFi community movements and startups which center around communities of users rather than profit models for corporations.

Good article (http://australia.internet.com/r/article/jsp/sid/11107)

FreeNetworks.org (http://www.freenetworks.org/)
CommunityWireless.org (http://www.communitywireless.org/)
NoCat.net (http://nocat.net/)
Guerilla.net (http://www.guerrilla.net/)

[malcolmsharp]

It'd be nice to hear someone chime in about the WiFi community movements and startups which center around communities of users rather than profit models for corporations.

Yeah. I think all of this is ignoring one simple fact....

Anybody with a broadband connection can become a hotspot for a 100 bucks or less. I could for 40 bucks right now. Get the card. pop it into my router, set up the software, and then I'm a hotspot.

Another corperate thing that could happen is giving users discounts of some sort for being a hotspot for other users. In other words, the hotspots would be open to all subcribers to that system. The company would give you free setup and send someone over to set up the sytem.

[Kaber]

It would be really great to see Verizon partner with DSL customers willing to do this.

[Will T Smith]

The real Wi-Fi bubble is YET to burst.

We all know about the lack of Wi-Fi security (yes I know about WPA but no one has it yet). Well the more troubling thing is the COMPLETE lack of any security in a default WindowsXP setup.

These two ingredients together are a ticking time bomb for some VERY DESCRUCTIVE worms intended to move WIRELESSLY.

So it goes like this. WindowsXP, Win2000, etc... has ZERO network protection out of the box. In fact Microsoft was nice enough to set up an implicit share for you (C$, D$, etc...) for every drive you have. In a dialup or situation, your protected because NetBIOS isn't routable.

However, if I can get on the same physical network as your almost completely insecure network of Windows machines, I can wreck HAVOC. Without a critical mass of Wi-Fi and mobile Wi-Fi equipment, a worm doesn't have a chance of spreading. But, put a hotspot up every 300 yards and it's open season.

[GoConnect]

:lol:
I cannot agree more there is a huge bubble in the making. However, bubbles are not all bad. The consequence of such a huge bubble in WiFi is to cause an explosion in capacity for WiFi supply which in turn can only be good for average consumers as they will then get wireless internt access anywhere at high speed at hopefully, one day, zero cost, just like your everyday radio stations on wireless spectrum. That cannot be bad but then the next stage is set for the killer consumer application to go on WiFi to satisfy the consumers. Check out www.m-vision.tv for that matter. The railway mania resulted in massive capacity and with that consumer mobility. Your internet access on fixed line is so much cheaper now thanks to the internet bubble and what we all do now represent consumer applications. Consumer applications will be the big winners in this WiFi bubble so watch out for the first killer app for the consumer.