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Cahners Gets Real About W-ASPs

The market for Wireless-enabled Application Service Provider's (W-ASP) is not looking so hot according to a report from research firm Cahners In-Stat Group, which says the growth in use of wireless services has not aided the W-ASP industry in 2001.

The report, 'W-ASPs -- How Potent is Your Sting', cites the limited bandwidth of public wireless networks and the lack of interest shown in using wireless access devices such as WAP-enabled phones and Palmtops for accessing applications, allow wireless-accessible hosted applications to only survive in a few niches, largely within specific vertical markets.

According to Kneko Burney, a director at In-Stat: "The future of W-ASPs rests keenly on the growth and evolution of the wireless Internet and the comfort-level of U.S. business professionals using the Internet to interface with various applications," she speculates.

Surmising that the market does show promise in the long-term, Burney believes that growth for these hosted services in both U.S. business and consumer markets will be at best moderate in the next 2-3 years.

She says the current economic climate combined with the awkward nature of wireless access devices for using applications, and the often non-strategic nature of the applications, will lead to only a gradual adoption over the next 5 to 7 years.

In-Stat estimates that in 2001, W-ASPs support around 230,000 U.S. subscribers, comprised of U.S. business end-users in firms with more than 100 employees for the most party. This is a minor improvement on 2000 figures, reporting 226,000 W-ASP subscribers. Cahners also found that:

— More than 90% of current W-ASP subscribers reside in the business markets.

— The overwhelming majority of subscribers work for firms with more than 100 employees, where roughly 68% of these work for enterprise businesses, estimated at more than 140,000 subscribers in 2001.

— W-ASPs provision the infrastructure and services to deliver applications over the wireless network for a fee. These providers could also make these applications accessible via the public "wired" Internet in tandem with wireless networks.