Developments in wireless technology are taking numerous forms, and while mobility is a key component of many systems, the market is moving in directions that provide more opportunities than simply improving the ability of road warriors to stay in touch while traveling. In fact, when it comes to high-speed data, fixed wireless may represent the biggest opportunity for businesses -- from small offices to enterprises -- as well as for service providers. Make no mistake: Where conducted media are available, they will always provide better performance than wireless. But if your site isn't serviceable by traditional broadband services, wireless can be a great solution.

It's not surprising, in an environment where business meetings are regularly interrupted by the ringing of participants' cell phones, that most of the media hype surrounding wireless networking focuses on providing data services to the roaming user. Emerging third-generation -- or 3G -- wireless networks, together with microbrowser technologies, are widely viewed as key enablers for new business opportunities. But don't expect this revolution to happen tomorrow. It will be several years before the infrastructure is available, and it's by no means certain that the applications will be ready when the infrastructure arrives.

To structure our analysis of wireless technology, we've divided the market into four categories: Short-range wireless networks, sometimes referred to as PANs (personal area networks), are expected to provide dirt-cheap connectivity among a variety of intelligent devices. Wireless LANs, which provide in-building, high-speed access over distances of 100 feet or more, are beginning to gain widespread market acceptance, spurred on by broad industry acceptance of key standards and dramatic reductions in price. Fixed-access wireless systems, which include technologies ranging from licensed microwave and unlicensed spread-spectrum point-to-point systems to so-called wireless DSL and satellite, represent a significant growth opportunity in many markets. Finally, there are wireless WANs, representing next-generation cell-based data systems that potentially will provide global data mobility.

Short-Range Wireless Networks (Personal Area Networks)

If you carry a notebook computer or PDA in your briefcase, you probably have PAN capabilities in the form of an infrared data port. Trouble is, only the geekiest among you ever takes advantage of this technology. Is this because there are technical limitations associated with infrared as a wireless technology, because the applications for the technology are immature, or because it's just so hard to use? Probably a little of each.

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If your stance is that it's mostly a case of infrared being the wrong technology, you may buy into the projections made by advocates of Bluetooth, a low-cost, radio-based network technology that provides 1-Mb performance over short distances--30 feet or less. The Bluetooth market is going to be big, according to a recent study by Cahners In-Stat Group. How does a $5 billion market by 2005 sound? Lest you dismiss this projection the same way you might regard the local weatherperson's seven-day forecast, note that nearly every significant player in the industry--from cell-phone manufacturers to computer makers to chip fabricators -- is on board to back Bluetooth. It's truly an unprecedented level of industry support.

Bluetooth won't be perfect, but the key to its probable success lies in its ubiquity, which in turn is a product of its low cost. While initial product offerings, including PC Card interfaces for notebook computers, are expected to be priced in excess of $100, the long-term goal of Bluetooth advocates is to develop single-chip implementations that will cost no more than $5. With that kind of pricing, it's not unreasonable to think of every information device as a node on a PAN.

Obstacles to Bluetooth's success do exist. The underlying security model has raised concerns, and there's potential for interference in the already-crowded 2.4-GHz band, which is also home to 802.11 wireless LANs. Perhaps most important, just because your StarTac phone and Palm PDA share a common network interface, synchronizing their contact lists isn't a given unless the application software provides appropriate support. But Bluetooth is on a roll, and no one really sees any significant potential for derailment. Cables may truly become a thing of the past.

Wireless LANs

While Bluetooth may represent the future, wireless LANs are here today, and the market momentum is growing. Gartner Group forecasts that wireless LAN revenue will total $487.5 million this year, and that the value of installed wireless LANs will be $35.8 billion in 2004. Much of this build-out is in the enterprise space, but one of the most intriguing applications of the technology appeals to mobile professionals, with the implementation of wireless LAN hot spots in hotels, convention centers and airports.

Spurred on by the widespread adoption of the IEEE 802.11 standard, the wireless LAN market has emerged from phase one -- slow performance, high cost and shaky interoperability -- and is now well into phase two -- market acceptance. In particular, the 802.11b 11-Mbps standard, also known as Wi-Fi, is now delivering high throughput while pushing hard to achieve the market magic associated with sub-$100 NICs. The next step, moving into higher frequencies and still higher bandwidths -- up to 54 Mbps -- is coming within the next two years.

Vendors of wireless LANs are benefiting from two important developments: First, the technology isn't quite as mysterious as it was just a couple of years ago. The product offerings are more polished, and many enterprises and systems integrators have advanced beyond the pilot phase, carrying valuable expertise in the technology's capabilities and limitations into production environments. Second, the increased market demand is spurring competition at the chip level, and while Intersil Corp. and Lucent Technologies still dwarf other players, the intense rivalry between the two for market leadership is spurring lower-cost, technologically richer solutions. In addition, other silicon houses, including Texas Instruments, are beginning to emerge as viable competitors. The end result is lower prices; we expect 11-Mbps 802.11b NICs to be broadly available for less than $100 sometime in 2001. Access-point costs will also fall somewhat, and functionality will improve.

While 802.11b is the obvious choice in today's market, upstarts Atheros Communications and Radiata Communications (now owned by Cisco Systems) have garnered significant interest for their support of the 802.11a standard. Both companies are close to delivering silicon products that provide speeds of up to 54 Mbps in the less congested 5-GHz band. How quickly these vendors can translate prototype chips into real offerings is an issue of significant debate, but we expect to see products emerging in mid- to late 2001. While these developments will open new opportunities, they may cause some network architects to question whether it makes sense to invest in a 2.4-GHz 802.11b infrastructure with 5-GHz 802.11a products on the horizon.

The 802.11b marketers acknowledge the importance of 802.11a products, and the Wireless Ethernet Compatibility Alliance (WECA) has plans to certify 802.11a offerings. But the 802.11b proponents suggest that deployments of 11b and 11a can easily coexist by using dual-radio access points. Unfortunately, not only is the dual-radio access-point market quite limited (Intermec Technologies Corp. and Lucent are the only vendors), but such a model assumes that the transmission characteristics of 11b and 11a products will be similar. If they aren't, deploying a dual-radio-capable infrastructure today won't necessarily pay off in the long run. Faced with this prospect, many organizations would be well advised to wait this market out before making too much of an investment in wireless infrastructure, unless compelling applications exist that can be cost-justified over two years.

Interestingly, the most substantial environment today for wireless LANs is the SOHO (small office/ home office) market. Very few people want to recable their homes, and the size of most homes and small offices is ideal for wireless LANs. Furthermore, we've already seen vendors of 802.11a products targeting home entertainment, including MPEG video, as a key application.