David Fraser think he knows the shape of things to come in the Wi-Fi industry, and he’s excited about it.
Fraser, a Scotsman transplanted to sunny California, has a unique perspective. He’s the CEO of Devicescape, which makes embedded Wi-Fi software that simplifies and automates connecting to a Wi-Fi network—any Wi-Fi network.
Devicescape’s technology appears in products from six of nine major cellular handset manufacturers, including in all the N and E series smartphones from Nokia, products from Hewlett-Packard, HTC Corp.—a dominant player in the Windows Mobile smartphone market—and many others.
The company is also now selling a user-installable version of its software for the iPhone through Apple’s AppStore—which led us into a fascinating conversation about where the industry is going, and the role Fraser hopes his company will play.
On the iPhone and Wi-Fi
“[The] iPhone is actually the first device other than a PC, certainly the first handset, where Wi-Fi is incredibly heavily used. It has changed a whole bunch of mindsets about what the mobile Internet is, and shown that there’s really big consumer demand for rich types of services. It goes way beyond making phone calls and SMS now, to consulting the weather, doing social networking, watching YouTube videos, etcetera, etcetera.”
“The [cellular] industry has reported a 30-times average increase [in data usage] on iPhones [compared to other smartphones]. When you try and overlay all that data traffic on a 3G network, you very quickly get incredible saturation. The role of Wi-Fi has been to provide rich services to consumers without flooding the 3G network.”
“So you see AT&T buying WayPort and bundling free Wi-Fi access for iPhones. What [the iPhone] has done is made the service providers wake up to the strategic value of Wi-Fi, and unleashed a flood of new handset developments, all trying to emulate this sort of service centricity that the iPhone has so clearly demonstrated.”
“The story on the iPod touch is similar, but simpler. It has lit up thousands of R&D projects all over the world to integrate Wi-Fi and to service-enable a bunch of other products—so media players certainly, but also games and even cameras. All the big consumer electronics companies are now trying to figure out how to accommodate Wi-Fi and build in services.”
On iPhone’s impact on Devicescape
“Even three years ago [before Devicescape launched its product], when we were doing a lot of research and development, people were putting Wi-Fi into all sorts of consumer electronics gadgets. But it was far too complicated for people to use. The support and product returns eliminated all profitability from those products.”
“The iPod and iPhone are much, much easier to use—they’ve set a new standard for usability—but it’s possible to improve on it even more. The solution to making Wi-Fi easy to use is regarded as completely essential to the success of those products [now under development]—and that’s what we do. So yes, we’re seeing significant R&D and people trying to solve usability problems with software like Devicescape’s.”
On Wi-Fi everywhere
“What’s happening now is that Wi-Fi is changing from being only home and business to being accessible just about everywhere. I’m not talking about muni[Wi-Fi], which has taken a bit of a backseat. I’m talking about Wi-Fi showing up in all the places that people are, even in their cars and in public transportation.
“It’s mushrooming, and a lot of little fragmented networks can be seamlessly knit together using a technology like Devicescape. So [Wi-Fi] is going to be more available, it’s going to be complementary to the 3G network so they work together. The complexity is going to be taken out of it. Rather than users having to sign in with a Web browser in a coffee shop or on [a cell] network, it’s just going to happen. It’s going to happen behind the scenes.
“Users may or may not be aware that they’re using a Wi-Fi network. That’s what we’re trying to get to. That’s our golden vision—that by employing a few special tricks, we’re actually able to hop the device onto a Wi-Fi network or sign them in without them even knowing it’s happening. And that sort of ease of use starts enabling access in all sorts of low cost products.”
On where we’ll see Wi-Fi next—and how cool that might be
“We see Wi-Fi in PCs and smartphones today of course, but what is going to hit in two years is that every [digital] camera, every little video camera, every game system, GPS systems—you name it—they’re all going to be, behind the scenes, connecting to the network and interacting with Web services. There’s no doubt about it.”
“Let me give you one example: the little Flip Video camera from Pure Digital—it’s a $100 [digital] video camera about the size of a deck of cards. You press a single button to start recording and push it again to stop. This is a fantastically popular product. What’s cool about it is that you can flip out a little USB cable, plug it into your computer and upload the video you just took to YouTube without doing anything. That’s what really makes it fly.”
“But imagine a scenario where a manufacturer did exactly the same thing but [said,] ‘Why plug it into a computer?’ What if you record some video and later you’re walking down the street with the camera in your backup and the device is scanning for Wi-Fi networks—and when it finds one, it connects and uploads the video on the fly? That’s an example of the user not really having to think [about connecting] or going through some big complicated process.”
“And the thing with Wi-Fi is that it can be incredibly inexpensive. So it can be put in a $40 dollar bill-of-materials product because the price of silicon is about $2 now, and falling rapidly.”
On Wi-Fi in cars
“What’s happening in the car market is really quite exciting for Wi-Fi. There are three different areas that we see.”
“One is providing Wi-Fi in the car for the passengers, using a cellular backhaul…The reason why car manufacturers want to do that is that they can sell a subscription service. They can partner with a carrier and get some revenue. I think it’s quite speculative whether human beings will actually use that…But the idea of the kids being able to play game systems in the back of the car might well work. And don’t underestimate the value of a $20-to-$30-a-month subscription to the car company. It’s a lot of profitable revenue.”
“Then there’s telematics systems and other types of intelligence in the car. When you pull into your garage at night or start your car in the morning…the telematics system will actually reach out to your home gateway over Wi-Fi and pull down updated maps, traffic reports. There’s a company—one of our customers—that is doing subscriptions with different content providers like newspapers. And it’ll do text to speech. It’ll actually read you the morning news on your commute. That’s a service [for which] they’re going to charge $10 to $12 a month.”
“Those types of things—can you get a recurring revenue and offer a useful service by burying a Wi-Fi radio in the car. It’s a $5 investment that might unlock $5 of revenue a month.”
“The third thing that’s happening in cars with Wi-Fi is that they’re putting it into engine management systems. So it’s a diagnostic connection. You pull into the [service station] to get gas—they’ll equip stations with access points, and actually be able to report problems with your car.” [Editor’s note: Stay tuned for more on in-car Wi-Fi in January.]
On the decline of muni-Wi-Fi
“I think it was just incredibly messed up. There are so many issues in the way it was set about that it’s hard to know where to start. But I think the root of it is that if you’re trying to blanket a large area with Wi-Fi, it’s going to be complicated and it’s going to be expensive. And with the lack of a good business model, those two things made it incredibly challenging.”
“Wi-Fi just doesn’t do well for large-scale areas—that’s what wide area network technology is for. It probably is going to be better for either a kind of grassroots model, where the likes of Meraki [Inc.] could cover areas–or a WiMAX- or a cellular-centric strategy. Wi-Fi is great for targeted small areas. It’s the rifle shot to cellular’s shotgun blast.”
“But I’m excited about some of the initiatives going on. I think Meraki has got an interesting model. And there are some telecom giants trying to do the exact same thing. British Telecom recently made a strategy shift to embed an open SSID, an open network capability, into their business hubs.”
“There are hundreds of thousands of businesses that are attached to BT, that will now offer to any BT OpenZone subscriber the capability to access the Internet [from their hubs]. It starts with 10,000 access points, with the potential to go to hundreds of thousands of access points for essentially no additional infrastructure costs.”
Gerry Blackwell is a veteran technology journalist and frequent contributor to Wi-Fi Planet.