NYTimes.com Article: Silicon Valley Hikes Wireless Frontier

khare at alumni.caltech.edu khare at alumni.caltech.edu
Tue Apr 8 15:57:43 PDT 2003


This article from NYTimes.com 
has been sent to you by khare at alumni.caltech.edu.


Pretty mild as PC Forum wrapup stories go... Steve's right on in surveying the *broad* landscape for lay readers (well, Times readers). And Wildseed itself might individually be interesting, but the article is pervesely arguing why another Microsoft *won't* emerge here. 

In fact, there's still no good answer for a peer-to-peer occasionally-connected / nomadic architecture. Watch this space...

Rohit

khare at alumni.caltech.edu


Silicon Valley Hikes Wireless Frontier

April 7, 2003
By STEVE LOHR 




 

Eric Engstrom spent seven lucrative and exhilarating years
at Microsoft - working on big projects, making a name for
himself, even testifying on the company's behalf in its
federal antitrust trial. But in 2000, Mr. Engstrom walked
away from Microsoft and the personal computer industry,
which seemed to have settled into maturity. He founded his
own company and set off to pursue innovation and riches
elsewhere. 

"The opportunities are out on the edge, and the edge of
software development has got to be the phone," said Mr.
Engstrom, 38, the chief executive of Wildseed, a start-up
in Kirkland, Wash. 

Mr. Engstrom personifies the migration of talent,
excitement and investment in computing toward the wireless
business as cellphones become more like computers and
hand-held computers morph into phones. To veterans of past
cycles in technology, the wireless world today has the look
of the personal computer business in the late 1970's or the
Internet in the early 1990's. 

"It's starting to happen, it's getting exciting again,"
observed Esther Dyson, who plays host to PC Forum, an
annual gathering of technology executives, entrepreneurs
and venture capitalists that was held late last month in
Scottsdale, Ariz. PC Forum began in 1977. But now the PC
stands not for "personal computer" but "Platforms for
Communication." 

The economics of wireless is still unclear and technology
standards are not yet in place. Nor does the move to
wireless computing spell the death of the personal
computer, any more than the rise of the PC meant the demise
of the mainframe computer. But as wireless telephony and
computing combine, the center of gravity in digital
technology is clearly shifting. 

"People see the PC as played out, and they are looking for
new technology platforms to build new businesses on," said
Brad Silverberg, a former senior Microsoft executive who
left three years ago and is the founder of Ignition, a
venture capital firm that has invested in wireless
businesses, including Mr. Engstrom's start-up. 

The wireless convergence of phones and computers is made
possible by steady progress in chip making, memory and
miniaturization. Today's advanced cellphones have the
equivalent computing power of the desktop PC's of the
mid-1990's. 

Yet while the trend of advancing technology is clear,
little else is apparent. What companies, products, services
and technology standards will emerge as leaders in the
wireless arena is still uncertain. And that is because the
real competition has barely begun. 

More than 450 million cellphones will be sold worldwide
this year, industry analysts predict. But less than 10
percent of those will be the cellphone-computer hybrids -
sometimes called smart phones - that can handle not just
short text messages, but also send and receive e-mail,
display color photos and video, play music and games with
rich graphics, and browse the Web. 

"These hand-held smart phones are the frontier, but we're
just getting to the point where they are beginning to be
widely distributed," said Berge Ayvazian, president of the
Yankee Group, a research firm. 

The wireless computing field today resembles the PC
business a quarter of a century ago: people were excited by
the opportunities, technology standards were not yet
established, start-ups proliferated and many failed as the
economy was in doldrums. 

"It feels eerily similar in some ways," said David Nagel, a
former executive at Apple Computer and now the chief
executive of PalmSource, whose Palm operating system is
used on some smart phones. "But this new era in computing
is much more complicated." 

The added complexity is the result of a number of forces -
government regulation of telecommunications, multiple
layers of competing technologies, and an unruly crowd of
major telecommunications carriers, computer companies,
cellphone makers and upstarts in all these fields vying for
a piece of the business. 

Competing technology standards in wireless is one source of
industry uncertainty. At the level of "radio protocols" for
handling calls and data exchange, there are currently two
main standards - the global system for mobile, or GSM, and
code division multiple access, or CDMA. 

Qualcomm, a wireless technology company based in San Diego,
developed CDMA, and its users include Sprint, Verizon
Wireless, all of South Korea, and several other companies
overseas. GSM was a standard nurtured in Europe, and its
champions include Nokia and other European companies, AT&T
Wireless, Cingular and T-Mobile in the United States. About
three-fourths of cellphone subscribers worldwide use GSM.
In the United States, about 40 percent of subscribers use
CDMA. 

Meanwhile competition for the software to animate the new
hybrid computer-phones is just getting under way. An early
leader is the operating system made by Symbian, a British
company with several cellphone makers as investors,
including Nokia, Motorola, Siemens and Sony Ericcson. But
Microsoft is pushing its Stinger operating system, Qualcomm
has Brew, PalmSource offers Palm, and the freely
distributed Linux is starting to gain adherents, too. Sun
Microsystems and I.B.M. are promoting software based on
Java, which Sun created, as a layer that can run on any
operating system. 

These different approaches - whether operating systems or
Java - are a step toward a more "open" technology platform
for the cellphone business. In the past, each cellphone
maker typically had its own embedded operating system
tailored for its phones. The new generation of wireless
operating systems can run on devices made by various
manufacturers. 

In the PC industry, the business took off when software
developers had a standard operating system that ran on
standard silicon chips, which became a technology platform
on which many thousands of applications, from business
programs to games, were built. Those standards for the PC
industry came to be dominated by Microsoft's Windows
operating system and Intel's microprocessor. 

In wireless computing, most analysts expect the number of
software platforms to diminish over the next few years, but
with no single technology ruling the industry as Microsoft
does in PC's. Indeed, Microsoft's strength in the PC market
has somewhat worked against it in the wireless field as
handset makers in particular seek software alternatives
like Symbian and Java. Cellphone makers say they want to
avoid being beholden to Microsoft, which owns the crucial
Windows software for PC's and collects much of the
industry's profits. 

Sun Microsystems estimates that 75 million cellphones with
Java technology were shipped last year. "We're way ahead of
Microsoft in the wireless market," said Mark Tolliver,
Sun's chief strategy officer. "We're building a big
platform, attracting a developer community and creating a
business opportunity for companies in the wireless
industry." 

Microsoft, too, sees plenty of opportunity. Its strategy
seems to rely on bringing the familiar desktop functions of
e-mail, address lists, calendar programs and Web browsing
to the new smart phones. It hopes eventually to persuade a
portion of the millions of software developers who write
programs that run on Windows, mostly specialized software
for use inside corporations, to write applications tailored
for Microsoft's smart phone operating system. 

"We're all entering a market that doesn't really exist
yet," said Ed Suwanjindar, a product manager at Microsoft. 

Indeed, there are many obstacles still to be overcome.
Financially strained telecommunications companies have been
reluctant to invest in the high-speed wireless technology
needed to deliver video clips and other multimedia to smart
phones with color screens. One of the reasons European
carriers are so burdened with debt is that they spent more
than $100 billion merely to license the radio spectrum
needed for high-speed, third-generation wireless, or 3G.
South Korea and Japan are the leaders in embracing 3G
technology. 

As a less costly transition step, a number of companies are
working on software that would link cellphone networks with
Wi-Fi, also known as wireless fidelity, the increasingly
popular technology that uses unlicensed radio spectrum to
deliver high-speed Internet access wirelessly to notebook
computers. The software would allow high-speed links near
local Wi-Fi hubs and lower-speed connections to the
Internet elsewhere in a service described as "seamless
roaming" by Rod Atkins, general manager of I.B.M.'s
pervasive computing unit. 

The entrepreneurial programmers writing for the wireless
market want their software, from games to business
applications, to be distributed as widely as possible. 

"We're on the cusp of the mobile Internet experience, but
the key is going to be making sure the technological
architecture of this world is open," said William Plummer,
Nokia's vice president for government and industry affairs.
"The better it is for developers to write programs or
services that work with many handsets and across networks
globally, the better off we will all be." 

Last June, the Open Mobile Alliance was created to further
that goal. Its 16 founding companies include Nokia,
Motorola, I.B.M., Microsoft and Sun, and the alliance now
has 300 corporate members. The group is pushing to reach
agreement on technology standards so that wireless
computing can, like the Internet, work as an open network
where data, voice and video can be passed among many
telecommunications carriers and devices. A year ago, for
example, it was difficult to send short text messages
between carriers. No longer. 

Today, multimedia messages carrying photos, animation or
music files can only be exchanged with someone who has the
same kind of cellphone over the same network. Within a
year, that barrier may also fall away. 

Start-ups like Wildseed see enough promise in the wireless
sector to press ahead. The company has designed specialized
software and cellphone "skins" that change the look and
operation of a smart phone so that it can combine a phone
with a gaming machine, music player or video platform -
tailored to a person's favorite games, rock stars, sports
teams or fashion tastes. Besides having different colors
and styles, the skins, or faceplates, also have embedded
chips storing specific Wildseed software. Its backbone
software is also loaded on the cellphone. 

The company hopes to attract 12- to 24-year-olds, and its
first products are coming to market later this year on
smart phones made by Kyocera Wireless of Japan and early
next year by Curitel of South Korea. Wildseed plans to
charge $25 to $50 for its themed "smart skins" as well as
charging carriers and cellphone makers a license fee for
its software. 

While expectations are high, there's also a healthy dose of
realism in the wireless world. As Michael Kwatinetz, who
for years was a leading PC analyst on Wall Street and is
now one of Wildseed's venture backers, observed, "You can
get the trends right, but the timing wrong." 

The operating style for start-ups these days is far
different from the free-spending days of the dot-com boom
years of the late 1990's. On the subject of company perks,
Todd Ferkingstad, a 33-year-old engineer who left Microsoft
to join Wildseed, cited the takeout dinners provided on
"work-late Tuesdays," when the programmers stay into the
night. "That's about as extravagant as we get," he said. 

http://www.nytimes.com/2003/04/07/technology/07CELL.html?ex=1050828263&ei=1&en=59744c3f7fa16628



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