In 2000, according the IDC, approximately 101.4 million desktop
PCs were shipped, generating $141 billion in revenues.
Many new consumers were attracted by low prices, higher
capabilities, and stylish colorful designs. During the same period,
a total of 26 million notebook computers, valued at $57.7
billion, were shipped worldwide, based on IDC research.
Additionally, most PC vendors support at least one wireless protocol
and many offer services to facilitate the transition to a
wireless computing environment. It is projected by many leading market research firms that within the next two to three
years, the desktop PC market will decline in favor of wirelessenabled
portable PCs, handheld Pocket PCs, and other devices.
Wireless phones, PDAs, pagers, and modems are expected
to surpass PCs as the most popular Internet access devices.
Shipments of Wireless Internet devices will sustain doubleand
triple-digit growth over the next few years. Mobile electronics
sales may rise to $10.5 million in 2001, as consumers
continue to enjoy the ease with which they can access information
and entertainment and stay in touch with friends and
family. Wireless phones maintain the largest share of that category,
with sales forecast at $3.7 billion in 2001, a 16 percent
increase over 2000, according to the Consumer Electronics
Association (CEA). While the PDA market in the United States
continue to be strong, the Yankee Group projects 13 million to
be sold in 2001, growing to over 26 million in 2003.
Approximately 11 percent of PDAs had Internet access, while
Jupiter projects that the number of U.S. PDA users interacting
with Web data and content will approach 14 million by 2005.
Major consensus holds that within the next three to five
years, the majority of devices that tap into the Internet for data
will not be wired personal computers, but rather a mix of handheld
devices—including cellular phones, PDAs, pagers, and
Pocket PCs. Research firm IDC projects that the worldwide
market for these devices will grow to over 67 million units sold
and $18.1 billion in revenues by 2005. Many of these devices
shall also offer to the consumer new and integrated features
and functions such as cameras and music players, which will
make it more convenient for consumers to carry only a single
device. Many of these devices will take on new form factors—
designs which look less like a phone. These new devices will be
designed to make viewing and entering information easier.
This same period will also witness the emergence of
human-to-machine and (though still embryonic), machine-tomachine
communications, provided by embedded wireless
communication links for data exchange. This will improve work
flow for the business user and create new opportunities for
companies. This trend accelerated in Europe and Japan.
Examples of human-to-machine communications via wireless
networks already exist, allowing people to access content and
applications from network servers. One example of machineto-
machine communications is vending machines. A wireless
device embedded in the machine communicates with a central
computer that keeps track of how many soft drinks or other
items are left; it lets suppliers know when the vending machine
needs to be restocked. The device may also notify the central
computer when the vending machine is in need of repairs.
These devices can be attached to home appliances such as
refrigerators, air conditioners, and security systems to control
lights, activate alarms, and provide climate control. Other
embedded devices will monitor environmental factors like carbon
monoxide levels. In the vehicular environment, these
devices will provide navigation aids and also work as security
and theft-prevention devices. Referred to commonly as telematics,
which is the blending of computing and wireless
telecommunication systems, which creates useful applications
for automobiles and trucks. Telematics systems often use global
positions systems (GPS) or cell-based technologies to facilitate
location-based services such as roadside assistance offered
by companies such as GM’s OnStar. For telematics to become
successful and widely accepted, car manufacturers have to
agree on a standard for hardware and operating system, otherwise
companies have to build specific versions of their applications
for each auto manufacturer, resulting in a segmented
industry.
In the United States alone, there are over 210 million
existing cars and sales of new cars are about 17 million per
year. Worldwide annual sales of new cars are over 50 million.
According to the Yankee Group, 50 percent of new cars and 90
percent of highend vehicles will have telematics to keep users
connected while in the car in 2006, which equates to a market
over $25 billion. Furthermore, on the enterprise side,
there are over 40 million fleet vehicles in the United States
alone, which includes trucking, delivery, and service vehicles.
We believe that in the not-to-distant future, connectivity with
the Internet for many consumers will be via wireless device
and not home PC.
The U.S. mobile phone market is expanding with an additional
11 percent of households expected to purchase a wireless
handheld device in 2002, according to a survey conducted
by Takar Nelson Sofres Intersearch. We find that over 40 percent
of Nextel’s subscriber base has data-capable handsets and
more than half of Sprint PCS subscribers have data phones.
These run text-based microbrowsers that can only surf limited
numbers of Web sites, but that number is growing. Using push
technology, it will be possible for sites to alert users of downloadable
content, based on customized settings. These early
trailblazers will fundamentally change Internet usage patterns
from one or two long sessions a day on an office or home PC
to dozens of low-intensity sessions a day for specific Web clips
or data points. (Figure 3-6 shows projected U.S. data-only
service growth, while Table 3-5 shows worldwide handheld
shipments.) 116
IT Certification CCIE,CCNP,CCIP,CCNA,CCSP,Cisco Network Optimization and Security Tips
WIRELESS SUBSCRIBERS AND INTERNET GROWTH
This new market is powered by fast-growing demand for mobile
and Internet services and complementary technologies that allow
people and information to be increasingly interconnected. The
penetration of wireless service subscription continues to increase
dramatically around the globe. It is almost impossible to be in a
place where no one uses wireless phones. Continued growth in the
United States, Europe, and Japan is strengthened by emerging
wireless device industries in China, India, and Latin America.
Riding on this wave of growth, the number of wireless subscribers
by mid-2001 exceeded 119 million subscribers in the United
States alone, according to the CTIA, and the number of U.S.
Internet users topped 167 million based on Nielsen NetRatings.
Furthermore, over 60 percent of U.S. households have online Web
access. The Strategies Group predicts that wireless data penetration
will reach 60 percent in 2007, from just 2 percent in 2001.
This massive growth is attributed to the aggressive rollout of highspeed
services and applications and consumer acceptance.
Furthermore, over the next several years, the majority of devices
that tap the Internet will not be home or office PCs, but rather
wireless devices. This trend is accelerated in Japan and Europe,
where the Wireless Internet is transitioning from text-based short
messaging (SMS) to digital audio and video broadcasting. The
demand for high-bandwidth wireless applications and connections
to corporate networks from the field is fostering the development
of and demand for Wireless Internet networks. Figures 3-1, 3-2, 3-
3, and Table 3-4 break down United States and global Internet and
wireless use.
The growth of the Wireless Internet is directly linked to
the success of the wired, HTML-based Internet. The Yankee
Group, a major research firm, estimates that by 2005, approximately
56 million people in the United States, or almost 20
percent of the population, will regularly tap into the Wireless
Internet over a voice-enabled device; a major investment
banking firm takes an even more optimistic outlook, projecting
115 million subscribers in the same period. The Wireless
Internet will exploit the gold mine of content available in digital
format from Internet servers designed originally for wired desktops. Many of the largest players, such as AOL, Yahoo!,
and Microsoft are charging forward into wireless as a key
growth initiative. Carriers such as AT&T, Nextel, Sprint PCS,
Verizon, OmniSky, Metricom, Vodafone, and many others
offer Wireless Internet access through cellular phones, PDAs,
RIM pagers, and various other devices. Figure 3-4 shows projected
Wireless Internet growth in the United States and
Figure 3-5 shows projected growth worldwide.
and Internet services and complementary technologies that allow
people and information to be increasingly interconnected. The
penetration of wireless service subscription continues to increase
dramatically around the globe. It is almost impossible to be in a
place where no one uses wireless phones. Continued growth in the
United States, Europe, and Japan is strengthened by emerging
wireless device industries in China, India, and Latin America.
Riding on this wave of growth, the number of wireless subscribers
by mid-2001 exceeded 119 million subscribers in the United
States alone, according to the CTIA, and the number of U.S.
Internet users topped 167 million based on Nielsen NetRatings.
Furthermore, over 60 percent of U.S. households have online Web
access. The Strategies Group predicts that wireless data penetration
will reach 60 percent in 2007, from just 2 percent in 2001.
This massive growth is attributed to the aggressive rollout of highspeed
services and applications and consumer acceptance.
Furthermore, over the next several years, the majority of devices
that tap the Internet will not be home or office PCs, but rather
wireless devices. This trend is accelerated in Japan and Europe,
where the Wireless Internet is transitioning from text-based short
messaging (SMS) to digital audio and video broadcasting. The
demand for high-bandwidth wireless applications and connections
to corporate networks from the field is fostering the development
of and demand for Wireless Internet networks. Figures 3-1, 3-2, 3-
3, and Table 3-4 break down United States and global Internet and
wireless use.
The growth of the Wireless Internet is directly linked to
the success of the wired, HTML-based Internet. The Yankee
Group, a major research firm, estimates that by 2005, approximately
56 million people in the United States, or almost 20
percent of the population, will regularly tap into the Wireless
Internet over a voice-enabled device; a major investment
banking firm takes an even more optimistic outlook, projecting
115 million subscribers in the same period. The Wireless
Internet will exploit the gold mine of content available in digital
format from Internet servers designed originally for wired desktops. Many of the largest players, such as AOL, Yahoo!,
and Microsoft are charging forward into wireless as a key
growth initiative. Carriers such as AT&T, Nextel, Sprint PCS,
Verizon, OmniSky, Metricom, Vodafone, and many others
offer Wireless Internet access through cellular phones, PDAs,
RIM pagers, and various other devices. Figure 3-4 shows projected
Wireless Internet growth in the United States and
Figure 3-5 shows projected growth worldwide.
INTERNET AND BROADBAND
The United States leads the world with over 167 million Internet
users of which more than one third have broadband connectivity,
according to a study by Arbitron. This study concluded that
64 percent of Internet users who have broadband access were
connected through their workplace, and the balance have home
access. The Internet has transitioned from text-based email
and file transfer in the mid-1990s to digital audio broadcasting
and animated advertising in early 2000. The demand for high
bandwidth applications such as animation, video streaming,
and high-speed connections to corporate networks has led to a
multi-megabit bandwidth race. Digital subscriber line (DSL) and
cable modem technologies are main contenders for this high
bandwidth race, followed by emerging wireless networks.
In the autumn of 2000, the U.S. Department of Commerce
found that 51 percent of all American homes had a computer,
and that nearly two-thirds of American Internet users had
bought something online. These percentages are similar to
those of other developed nations, as depicted.
By 2001, there were over 2.3 million DSL customers in the
United States. Estimates show the market for DSL customers will
reach 7.74 million residential customers and 1.83 million business
lines, for a total of 9.57 million DSL lines deployed by 2003.
High-speed connectivity is a commodity. As service providers
adapt their networks and strategies to meet the demand for
high-bandwidth services and applications at reduced cost, some
are attempting to capture high-bandwidth customers by offering
access to key information service providers (e.g., a specific
Internet service or digital video provider).
The customers’ key interest in high-bandwidth service
includes speeding up large file transfers, viewing high-resolution
images and enabling multimedia applications such as streaming
audio and video. The attempt of service providers to restrict
access to certain information content providers is likely to divert
attention from developing cost-effective high-speed networks
and create opportunities for other providers to offer access to
other information content providers.
Early adopters of broadband services are affluent. Of broadband
users, 21 percent of these households have annual
incomes over $100,000. Broadband users are also twice as likely
to be active online purchasers when compared to low-speed
users.* Additionally, most of these users also have cellular
phones, PDAs, and other handheld devices such as digital cameras
and music players.
In a recent survey of online consumers, 80 percent stated
that they would pay approximately $25 per month for broadband
access alone; 26 percent of those said that they would pay
$50 or $60 for a package of broadband-enabled applications
(including premium quality downloadable music or video files)
in addition to the cost of broadband access.† Tables 3.2 and 3.3
show the number of users and market penetration of wireless
access worldwide.
As cellular technology connects phones, PDAs, and other
devices across networks, wide area networks (WAN), local area
networks (LAN) and the personal area network (PAN), we see
the emergence of IEEE’s 802.11B as the de facto wireless
WAN standard. As major corporations including Cisco,
Compaq, Dell, and others are designing their products for
faster cable-free network setup in offices and corporation campuses,
we believe that the home market will also adapt, according
to a study conducted by the Aberdeen Group, the home
network market, including both wireless and wired initiatives
will hit $13 billion by 2005.
users of which more than one third have broadband connectivity,
according to a study by Arbitron. This study concluded that
64 percent of Internet users who have broadband access were
connected through their workplace, and the balance have home
access. The Internet has transitioned from text-based email
and file transfer in the mid-1990s to digital audio broadcasting
and animated advertising in early 2000. The demand for high
bandwidth applications such as animation, video streaming,
and high-speed connections to corporate networks has led to a
multi-megabit bandwidth race. Digital subscriber line (DSL) and
cable modem technologies are main contenders for this high
bandwidth race, followed by emerging wireless networks.
In the autumn of 2000, the U.S. Department of Commerce
found that 51 percent of all American homes had a computer,
and that nearly two-thirds of American Internet users had
bought something online. These percentages are similar to
those of other developed nations, as depicted.
By 2001, there were over 2.3 million DSL customers in the
United States. Estimates show the market for DSL customers will
reach 7.74 million residential customers and 1.83 million business
lines, for a total of 9.57 million DSL lines deployed by 2003.
High-speed connectivity is a commodity. As service providers
adapt their networks and strategies to meet the demand for
high-bandwidth services and applications at reduced cost, some
are attempting to capture high-bandwidth customers by offering
access to key information service providers (e.g., a specific
Internet service or digital video provider).
The customers’ key interest in high-bandwidth service
includes speeding up large file transfers, viewing high-resolution
images and enabling multimedia applications such as streaming
audio and video. The attempt of service providers to restrict
access to certain information content providers is likely to divert
attention from developing cost-effective high-speed networks
and create opportunities for other providers to offer access to
other information content providers.
Early adopters of broadband services are affluent. Of broadband
users, 21 percent of these households have annual
incomes over $100,000. Broadband users are also twice as likely
to be active online purchasers when compared to low-speed
users.* Additionally, most of these users also have cellular
phones, PDAs, and other handheld devices such as digital cameras
and music players.
In a recent survey of online consumers, 80 percent stated
that they would pay approximately $25 per month for broadband
access alone; 26 percent of those said that they would pay
$50 or $60 for a package of broadband-enabled applications
(including premium quality downloadable music or video files)
in addition to the cost of broadband access.† Tables 3.2 and 3.3
show the number of users and market penetration of wireless
access worldwide.
As cellular technology connects phones, PDAs, and other
devices across networks, wide area networks (WAN), local area
networks (LAN) and the personal area network (PAN), we see
the emergence of IEEE’s 802.11B as the de facto wireless
WAN standard. As major corporations including Cisco,
Compaq, Dell, and others are designing their products for
faster cable-free network setup in offices and corporation campuses,
we believe that the home market will also adapt, according
to a study conducted by the Aberdeen Group, the home
network market, including both wireless and wired initiatives
will hit $13 billion by 2005.
THE WIRELESS INTERNET MARKET
Forecasts for the Wireless Internet market span a wide
range, however, all are in agreement that while the market
is still in its infancy, it is poised for enormous growth over the
next several years, due to large numbers of people who will
have access to it with their handheld devices. Other platforms
besides mobile phones, personal digital assistants (PDAs), and
Pocket PCs will be able to access the Wireless Internet, appliances,
motor vehicles, and other machines will also play a significant
role. For the Wireless Internet to be successful, it is
important to educate the market of its possibilities and develop
compelling applications that will take advantage of devices
that can accompany people and provide “anytime, anywhere”
access.
range, however, all are in agreement that while the market
is still in its infancy, it is poised for enormous growth over the
next several years, due to large numbers of people who will
have access to it with their handheld devices. Other platforms
besides mobile phones, personal digital assistants (PDAs), and
Pocket PCs will be able to access the Wireless Internet, appliances,
motor vehicles, and other machines will also play a significant
role. For the Wireless Internet to be successful, it is
important to educate the market of its possibilities and develop
compelling applications that will take advantage of devices
that can accompany people and provide “anytime, anywhere”
access.
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