New research from Forrester has forecast that the hype surrounding public wireless local area network (WLAN) hotspots will lead to the next dot.com crash. The company also claimed that Bluetooth devices will outnumber WLAN devices four-to-one by 2008.
Forrester has forecast that there will be 286 million Bluetooth-enabled phones, laptops and PDAs in Europe in 2008, compared with 53 million WLAN devices – mostly laptops.
Contrary to today’s vendor and operator noise and hype, public WLAN hotspot business cases will largely fail – as they’ll only serve a paltry 7.7 million users in 2008.
“With all the hype today about the rollout of WLAN public hotspots, it’s as if the dot.com boom and bust never happened,” said Forrester senior analyst Lars Godell. “We believe that much of the money being poured into public WLAN today to enable access — from places as diverse as bars, marinas, hotels, and airports, as well as train, bus, and metro stations — is being wasted.
“Simply, basic constraints on the number of devices in use and users’ willingness to pay a significant amount for Internet access on the go will limit public WLAN users to numbers well short of planned networks’ carrying capacity. Additionally, the sky-high costs of providing Internet backhaul from hotspots will kill many hotspot business cases”, Godell argued.
According to Forrester, for public hotspots to succeed, laptops are required, but only 10pc of Europeans own a laptop today, and the research firm expects that only 16pc will in 2008. “With all-you-can-eat prices at up to 130 euros per month, spotty hotspot coverage, unresolved national and international roaming issues, and corporate IT persistently worried about WLAN security and standards fragmentation, the hotspot market has a long way to go before takeoff. And 80pc of WLAN gear shipped so far has gone into the small office/home office market, not the enterprise market,” Forrester argued.
The research house has predicted that only 7.7 million Europeans (20pc and 15pc of WLAN-enabled PDA and laptop owners, respectively) will be public hotspot users in 2008. Compare that with the 312 million mobile phone users that Forrester has forecast in the same year and the hotspot bubble appears ready to burst.
Forrester said that when corporates eventually buy into WLAN for enterprise-wide use, the technology will mostly be used within a LAN setting with fat fibre optic pipes back to the Internet – or other private hotspots, such as in homes. In 2008, Forrester has estimated that 57pc of WLAN-enabled laptop owners will use private hotspots exclusively. As well as this, not all laptop and PDA owners will care enough to use the WLAN feature; in 2008, 28pc of WLAN-enabled laptop owners will not use the technology at all.
“Penetration of Bluetooth in phones will rise from 26 million handsets this year to 239 million in 2008,” Godell added. “Realistically, WLAN will only creep into 2pc of phones as part of a dual-mode chip solution in high-end hybrid devices like the Nokia Communicator and Sony Ericsson P800.
“Powerful mobile operators will convince handset makers not to contribute toward the killing of one of their overpriced cash cows – mobile voice – through enabling free or very cheap Wi-Fi calls. WLAN will increasingly show up in laptops, reaching 22pc this year and 80pc in 2008, as corporate deployments renew demand once security bugs have been fixed. While 66pc of laptops will have Bluetooth in 2008, 65pc will be dual-mode. Finally, six out of 10 PDAs get Bluetooth – twice as many as get WLAN.”
By John Kennedy
Buy your tickets now!