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iWireless World: A Mixed Outlook

LOS ANGELES-- The general sentiment at iWireless World this week is that the wireless industry in the U.S., specifically the rollout of 3G mobile technology, is still uncertain.

With last year's hype factor predicting an imminent boom in 3G wireless capability, many are skeptical of when it will take hold and which companies and carriers will helm its arrival.

3G (third-generation) is a mobile communication technology that promises bandwidth of up to 384 Kbps and works over wireless interfaces like GSM, TDMA, and CDMA.

At issue in the mass rollout of 3G in the U.S. is the networking and manufacturing of 3G devices, compatible wireless infrastructures, and whether 3G wireless systems, which provide always-on high-speed Internet access, will be more than just an isolated market.

"The hype got ahead of the applications," said Steven Carter, president and CEO of Cingular Wireless, who thinks that the U.S. will take years to catch up to the boom in wireless technology that has already taken hold in Korea, Japan, China, Scandanavia, and most of Europe. But when it does, says Carter, the U.S. will quickly surpass other countries in demand and usage.

Unfortunately, that same optimism is not generally shared among members of the industry.

Aside from the fact that the U.S. has been far outpaced by wireless Internet trends in other countries, the proliferation of personal computers in the U.S. has been a contributing factor in limiting the demand for wireless connectivity outside of certain enterprise functions.

There has also been a high level of disappointment among U.S. consumers over the limitations of handheld screens in terms of size, black and white interfaces, and the overall lack of high-speed access.

A panel discussion on wireless infrastructure discussed what 3G really means for the wireless industry and boiled it down to the mass availability of color displays, Internet access, more sophisticated browsers, MP3 and MPEG-4 streaming audio and video capability, and even video camera functionality as the features that will act as the catalyst for the 3G market.

"But market demand is still unproven," said P.K. Prasanna, president and COO of Flash Networks. "Is there really demand for mobile broadband? No one has yet proven this. So far businesses like Japan's iMode is popular for pretty basic features, but there is not yet a widely acceptable handheld application to test out on the market, and so far wireless carriers have not offered viable and appealing wireless options and cost structures."

Lars Johnson, director of business development for Flarion agreed. "At the moment we know very little about how reliable 3G service will be. What is the peer situation that tells us whether it will be popular and if other people are using it? If the price and performance is right, then there will be mass demand, just like there was for Internet access years ago. But at the moment, there sadly is not."

According to Art Feather, marketing manager for Cisco's Mobile Wireless Group, the U.S. mass deployment of 3G probably won't happen until 2006. Feather attributed this stall to too much confusion over technologies and cost structures.

"We're just too big, we have too much of the wrong attitude, and there are too many competitive wireless operators out there," said Feather. "If there was some consolidation in the industry, then there might be rapid 3G deployment."

A panel of entertainment executives took a milder approach to the rollout of 3G wireless services, instead trying to nail down how best to use wireless technology in it present and future state as the perfect marketing and branding tool for entertainment content.

And while the panelists admitted to moving into the wireless Internet space with a sense of urgency, there was great concern for first impressions on the wireless consumer and being as non-invasive in their marketing and content strategies as possible.

Companies like Disney Internet Group, New Line Cinema, and Sony Pictures have seen most of their popularity take hold on other continents, whereas the U.S. wireless market has been on the slow road in terms of figuring out a viable wireless business model and developing workable billing systems that appeal to consumers.

"We're not looking to bandwidth as the defining factor," said Rio Caraeff, vice president of Wireless Services for Sony Pictures. "Mobile wireless is not a television, it's about communicating with people and branding on mobile devices, not showing movies."

Etesh Mangray, director of business development for Disney Internet Group, boast 2.5 million subscribers in Japan alone, but scarcely mentioned any notable wireless marketing success in the U.S. Popular Disney properties in the Asian wireless market are Disney-related games, characters, and ring tones.

"We're still at the mercy of networking speeds, but we will start to trial-test wireless games as speed improves," said Mangray.

New Line Cinema's Gordon Paddison claimed great popularity for content licensing abroad for film properties such as "Lord of The Rings," and said that mobile gaming is still the leading wireless feature in Asian and European markets.

Ted Cohen of EMI Records described how his company is using wireless technology to reach out to music consumers and get music and information to people on the move. Cohen said that ring tones for wireless devices are a multi-dollar business right now for EMI and other record companies, and in some cases are more valuable to licensing companies and consumers than the actual music they stem from.

Still in the elemental stages, EMI is the process of building a wireless community for its music followers and getting out information on concert dates, new artists, and record releases through short messaging services (SMS), which Cohen calls a "great vehicle for disseminating information."

At the heels of wireless SMS technology is EMS (enhanced messaging services), which enables a wireless user to send graphics, and eventually MMS (multi-media services), wireless streaming technology.

A wireless concept many of the panelist agreed was very promising was location-based marketing; catching hold of the consumer in-between the home PC and the work PC and letting them know when the next box office opening is, or offering the consumer a location-based coupon whereupon if they go to the nearest Warehouse or retail locale and show the serial number of their mobile handset, they can get a discount on merchandise.

"We want to get information off the desktop and move it around," said Cohen, "At the moment, we're still trying to find that 'sweet spot' where either it works or it doesn't. The best wireless applications are the ones that don't exceed what the platform is capable of. However, exceeding expectations and being exciting and informative is key."