2. A la I-Mode
"The success of NTT DoCoMo's I-mode in Japan proves there is a lucrative audience for advanced wireless services."
It's true that I-mode has come much closer than any American or European service to providing a wireless Internet. Like the Internet, I-mode breaks up and transmits information in discrete electronic packets, and I-mode is compatible with HTML, so ordinary Web sites can be viewed from an I-mode handset.
Perhaps most important, I-mode has done what almost no Internet company has figured out: get users to pay for content. According to DoCoMo, approximately 30 percent of the sites designed for I-mode are premium (that is, paid) sites, and about half of I-mode's 23 million users subscribe to at least one premium site.
That sounds impressive, until you look at what they pay: The fees are between $1 and $3 a month. You've got to have a very large customer base to make any money on that kind of pricing. It's going to be some time before the total U.S. or European 3G audience reaches 30 million. Assuming the same rate of premium subscribers, that means a maximum of about $27 million a month available to a few thousand content providers - not exactly an industry tidal wave.
Moreover, the business model that enables content sites to flourish through I-mode depends on nearly all the revenue going back to the content providers. So far, U.S. and European mobile operators have been unwilling to share the wealth at that level. If they continue to balk, they may find themselves incapable of providing the personalized services that make I-mode so popular. If they give over to I-mode's business model, then it's not clear how they can make money. It's a riddle that few companies seem eager to solve.
3. Does Bluetooth Have Any Bite?
"Bluetooth will create a whole new world of devices that will stimulate the demand for wireless services, on and off the Internet. In just three to four years, Bluetooth will operate in more than a billion devices worldwide, letting computers talk to phones, PDAs and regular appliances without any wires."
To many, Bluetooth represents wireless nirvana. Named after a 10th-century Viking king, Bluetooth was developed by two engineers from Sweden's Ericsson in 1994. Its basic function is to allow different electronic devices to connect with one another without wires. So your Palm (PALM) can talk to your computer; your computer can talk to the Internet without a phone line; and both can talk to your stereo.
For that to happen, though, the technology needs to prove it can work. So far, Bluetooth has suffered the quintessential technology horror story: trade show demonstrations that don't work. From California to Hanover, Germany, reporters and analysts have watched Bluetooth demonstrators fall flat on their faces. Bluetooth boosters insist such stories are purely anecdotal, and that the bugs will be worked out.
