Popularity of VoIP and Wi-Fi is creating a new momentum in the wireless industry. Businesses, in the need to reduce cost, are demanding new solutions. Consumers, who join the “cool stuff to have” ideal, want new products to show off more than a mere productivity increase.
A new feature for wireless handsets in 2006, which is gaining its momentum in 2007, is the Wi-Fi/3G capable handsets, capable of being used on a 3G network (GSM/CDMA) as well as on a Wi-Fi network, performing handoff in both directions. The basics of its functionality could be described as follows. Picture yourself leaving your home to work, and right before doing so, you receive a phone call in your mobile. While talking using the Wi-Fi network in your home, you leave your house. Your phone then does a handoff from the Wi-Fi to the 3G network. Once arriving at your office, the handset automatically does another handoff, now from the 3G network to the Wi-Fi network. This is a reality today, but still in its early stages.
By providing Wi-Fi coverage inside the buildings, a massive IP network is in place. And it is being more and more explored these days. In Canada, the wireless phone penetration is still low, being 56per cent, when compared to our neighbour United States which is 73.2per cent. The message to the market is that there are lots of opportunities to be explored in Canada. With the VoIP capabilities hype, it is expected that Wi-Fi/3G handsets will boom the market between 2007 and 2010. New services will be offered to consumers and business users, enabling the massive deployment of Wi-Fi/3G capable handsets. The Fixed Mobile Convergence Alliance (FMCA), formed in 2004, is focused in accelerating the development of convergence products and services. Wi-Fi/3G capable handset penetration was among 1per cent in 2006, and will grow to 2.3per cent in 2007, 8.6per cent in 2008, 19.2per cent in 2009 and 32per cent in 2010. The graph below illustrates it.
The key driver is the businesses, who are always looking for cost reductions. Other drivers are broadband expansion, ARPU increase for carriers, VoIP service providers and competition in the market place.
The top 3 challenges that the industry will face is to put together a ROI model, carrier’s organizational structure and handset price. Battery issues have been overcome, by implementing sleep mode solutions to conserve energy.
Handset prices are expected to decrease considerably, from $400 in 2007 to $250 in 2010. Wi-Fi/3G capable handsets will grow from 2 million units in 2006 to 90 million units in 2010. Below are a few Wi-Fi/3G capable handset models.
BenQ Siemens P51
O2 XDA Stealth
O2 XDA Cosmo
O2 XDA Exec
Son Ericsson P990
Eduardo G Kibel is a research analyst in Frost and Sullivan’s Toronto office.