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2003 Survivor's Guide to Mobile and Wireless: Page 10 of 18

In 2003, however, we do expect to see a modest increase in the number of people who compute on the go without a notebook, a development made possible by an increasing array of highly functional handheld devices. While these products have significant long-term promise, we don't expect the new "tablet PCs" to make much headway in 2003. Not only are these devices expensive, they are also version 1.0 releases. Some IT professionals will evaluate and perhaps deploy them for niche or pilot applications, but most will wait awhile.

More intriguing are developments in the PDA and smartphone markets. Palm now has a credible enterprise platform that will let it compete with devices running the Pocket PC OS. At the same time, Pocket PC continues to mature, with enhanced performance, embedded wireless capabilities, a broader array of applications and development tools, and prices about half what they were a year ago. In addition, you'll see improved application integration capabilities and significant enhancements to back-end management platforms, from vendors that specialize in mobile device management as well as from more established desktop management vendors looking to broaden their markets. Gartner projects that it will grow from a $135 million market in 2000 to almost $750 million in 2005. Increased volume and competition are likely to make these platforms significantly more affordable, meaning 2003 may be the year when PDAs become EDAs (enterprise digital assistants).

We'll also see significant developments in the smartphone market. Phone manufacturers will add more data capabilities while PDA vendors will add telephony features. Many purists will still insist on choosing the best phone and the best PDA and integrating them via Bluetooth technology, but we think the smarter play is an integrated device. While the need to provide a reasonable screen may force smartphone vendors to maintain a larger footprint, we expect these devices to get thinner in the coming year, making them acceptable even to those who prize portability above all else.

By the end of 2003, all the major cellular phone service providers will have nationwide packet-switching IP data networks. We're not talking multimegabit broadband service, but getting 30 Kbps to 50 Kbps performance while driving down the interstate isn't half bad. At those speeds, you can get some serious work done, and it opens up new opportunities for mobile applications.

Alas, while the news is mostly positive, many questions will need to be answered during the coming year. While we've been pleased with the performance of early GPRS and CDMA2000 1XRTT service offerings, we're concerned that performance will decline once the subscription base goes up. Most carriers have extremely limited per-cell bandwidth available to support both voice and data services, so when overall usage heads north, performance will surely fly south.