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`SR: TECHNOLOGY 2003-1
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`Anytime, Anywhere
`The number of Wi-Fi hot spots is set to explode -- bringing the wireless technology to the rest of us
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`By NICK WINGFIELD Staff Reporter of The Wall Street Journal
`Updated March 31, 2003 12:01 a.m. ET
`
`In the beaten-down technology business, few trends generate the kind of wild buzz so
`common in the industry a few years ago. But there's one standout: wireless Internet
`access.
`
`This year, it will become much easier for mainstream consumers to learn what the fuss
`is all about. Prices are plummeting on wireless-networking gear, and many computer
`makers are making wireless capability a standard feature of their hardware, in some
`cases at no extra cost.
`
`All of which could potentially lead to an explosion in popularity for the technology and
`drastically change how people think about setting up their home-computer systems.
`Speedier wireless gear will also make it easier to use bandwidth-hogging applications
`like multiplayer video games within the home.
`
`At the same time, a number of other organizations are pushing efforts to build public
`wireless networks, so that people can wander from place to place with their laptops
`and stay continually connected to the Internet. Currently, only a small number of
`libraries, airports and coffeehouses offer such networks, which are known as hot
`spots, but telecoms and technology companies will build thousands more in the years
`ahead.
`
`Longer term, advocates believe the technology could spawn major changes in the
`communications industry, presenting a potential threat to the huge investment cellular
`carriers have made in wireless Internet services over competing data networks.
`Carriers have paid billions of dollars to license radio spectrum for wireless data
`services, but futuristic cellphones that use the wireless standard Wi-Fi, which operates
`on unlicensed spectrum, could provide much cheaper mobile Internet access. Some
`believe the nature of public places will be transformed as hot spots become more
`common. Pizza parlors, for instance, might try to lure teenagers by offering to
`download a free song or movie to the teenagers' portable Wi-Fi devices when they're
`sitting in the restaurant.
`
`Selling Frenzy
`Key to the growing popularity of wireless Internet access is Wi-Fi, or wireless fidelity.
`The umbrella name for a collection of related wireless technologies, Wi-Fi is an
`industry standard that has allowed hardware companies to create wireless products
`that communicate with each other. Sensing a booming market for wireless, dozens of
` and Apple Computer
`companies, including biggies like Microsoft Corp.
`MSFT -0.16%
`Inc.,
` are now aggressively competing to sell Wi-Fi products, from PC-
`AAPL +1.49%
`card antennas that slide into laptops to access-point antennas that plug into desktop
`computers.
`
`The competition has resulted in plummeting prices -- a huge boon to would-be
`wireless users. The most common flavor of Wi-Fi, known as 802.11b, is a case in
`http://online.wsj.com/news/articles/SB104871908296922000
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`Anytime, Anywhere - WSJ
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`point. According to research firm In-Stat/MDR, the average selling price for network
`cards based on 802.11b technology was $72 last year -- a number expected to fall to
`$50 this year and $23 by 2006. Even today, with frequent sales on Wi-Fi gear at stores
`like Best Buy
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`as low as $29.
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`The appeal of Wi-Fi is simple. For home users, going wireless means they can share a
`high-speed Internet connection with multiple computers without having to string cable
`through walls, under carpets and between floors.
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`The heart of a home wireless network is a boxy device called an access point that
`plugs into a user's Internet connection, whether the service comes over a cable-TV
`line or a digital subscriber line from the phone company. The access point, which can
`run as low as $89, then spreads Internet access to the rest of a house or apartment,
`up to a range of 200 to 300 feet. This allows users with a Wi-Fi-equipped laptop, for
`instance, to surf the Web while sitting on the living-room couch.
`
`Similarly, businesses are turning to Wi-Fi to make work environments more flexible.
`The technology makes it easier to shift work spaces around offices or to let employees
`punch out e-mails on their laptops in conference rooms before -- or, alas, during --
`meetings. Businesses are buying the bulk of Wi-Fi gear: Last year, the number of Wi-
`Fi networking devices purchased by businesses jumped 65% to 11.6 million, estimates
`In-Stat/MDR. Home users bought 6.8 million Wi-Fi devices last year, a 160% increase.
`
`Still, some industry executives think wireless will have the biggest impact outside the
`home and workplace, in the areas known as hot spots.
`
`Wi-Fi in the home "has this aura of a magic transformation of the Internet," but it really
`just means replacing cables, says Larry Brilliant, vice chairman of Cometa Networks
`Inc. of San Francisco, a closely held company that is building Wi-Fi networks around
`the U.S. But, Mr. Brilliant adds, using it in the home or office "does give people a taste
`of what it's like in a hot spot."
`
`Hot spots typically consist of one or more access points positioned on a ceiling, wall or
`some other strategic spot in a public place to provide maximum wireless coverage for
`a given area. Depending on the number of access points used, hot spots can be as
`small as a Starbucks or as large as an airport lounge or library. Once users in a hot
`spot fire up their laptops, they often get onto the Internet without changing much of
`anything on their computers. In other cases, especially when a hot spot charges a fee
`for access, users may need to fuss with software configurations on their laptops or set
`up an account through a Web page by providing a credit-card number.
`
`Hot spots have the potential to take the Internet places it couldn't easily go before.
`Already, they have proved a godsend for many users: Business travelers who are
`stuck without access to e-mail while waiting for flights or a breakfast appointment can
`flip on their laptops and jump onto the Internet in areas with Wi-Fi access, such as an
`airport lounge.
`
`The only trouble for the surfer on the go is that there aren't many hot spots yet. The
`Starbucks down the block may be one, as may the airport, the public library and a
`college campus. But there is nothing like the blanket coverage of cellular networks.
`
`That is starting to change. By the end of this year, there will be more than 24,000 hot
`spots world-wide, up from just under 6,000 last year, estimates research firm Gartner
`Inc. These numbers include so-called community hot spots -- free Wi-Fi networks put
`up around libraries and other public spaces by local governments or by consumers
`who share their high-speed Net connections with neighbors. Gartner estimates there
`will be almost 3,000 such community hot spots in operation this year.
`
`Beaming Business
`Some businesses are coming to see that hot spots can offer a competitive advantage.
`In one of the most prominent rollouts in the leisure industry, Marriott International Inc.,
` of Washington, by this spring will offer wireless Internet access in the
`MAR +0.16%
`conference rooms and lobbies of 400 Marriott hotels in the U.S., U.K. and Germany.
`Marriott says the wireless service will complement the in-room Internet access it
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`http://online.wsj.com/news/articles/SB104871908296922000
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`2/6
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`BLACKBERRY EX. 1012, pg. 2
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`Anytime, Anywhere - WSJ
`9/10/2014
`already provides in most of its hotels -- a $9.95-a-day service that's especially popular
`with the road-warrior business travelers who are among hotels' best customers.
`Marriott says it will charge customers $2.95 for the first 15 minutes of wireless access
`and 2.5 cents for each additional minute.
`
`"On an increasing basis," says Marriott spokesman Scott Carman, travelers are
`"selecting hotels based on the availability of high-speed Internet access. They want to
`have Internet access everywhere."
`
`Big high-tech companies are getting into the game, too. Intel Corp.
` ,
`INTC +0.09%
` are
`International Business Machines Corp.
` and AT&T Corp.
`IBM +0.94%
`T -0.71%
`backing Cometa, which will begin building a network of Wi-Fi hot spots in metropolitan
`areas around the U.S. this year. Cometa's plans are to install Wi-Fi points in
`restaurants, convention centers and other public venues so that wireless Internet
`access is within five minutes of anyone in the top 50 urban areas in the U.S. The
`company plans to sell wireless Internet access on a wholesale basis to existing
`Internet service providers so companies like AOL Time Warner Inc.
` 's
`AOL -0.85%
`America Online or EarthLink Networks Inc.
` can sell Wi-Fi access as an
`ELNK +1.73%
`option for their customers.
`
`Cometa's Mr. Brilliant says he expects the company will have 5,000 access points
`installed by the end of this year or early next year, though he's not ready to disclose
`where the hot spots will be.
`
`Wireless and telecom carriers are increasingly lining up behind Wi-Fi, too. AT&T
`Wireless Services Inc., Redmond, Wash., recently said it will offer Wi-Fi service to
`subscribers at more than 475 hotels and several airports. Deutsche Telekom AG 's T-
`Mobile USA offers Wi-Fi access at more than 2,100 Starbucks cafes and intends to
`expand service to about 400 bookstores operated by Borders Group Inc. by the middle
`of the year.
`
`When it comes to hot spots, the U.S. has a head start on Europe and Asia. Almost
`40% of world-wide hot spots will be in the U.S. this year, with about 36%, or around
`8,700, in Asia and 22%, or about 5,200, in Europe, estimates Gartner. But analysts
`believe the number of hot spots in those regions will gain on the U.S. British telecom
`operator BT Group
` PLC, for one, expects to have 400 hot spots on the
`BT +0.91%
`Continent by June and 4,000 by 2005.
`
`Until they're everywhere laptop-toting users hang out, hot spots will most likely have
`limited appeal. Cellular phones, after all, caught on with the average person only when
`service was broadly available. Wi-Fi also faces a fragmentation problem now:
`Although they all provide access to the Internet, most Wi-Fi hot spots are disparate
`systems that don't have the equivalent of cellular "roaming" agreements that allow
`users to easily move from one hot spot to another. In many cases now, different hotels
`or cafes may require separate accounts, with their own fees. Imagine the absurdity of
`having four accounts for cellphone service, one for every city you frequent, and you
`get a rough idea of today's patchwork of wireless hot spots.
`
`There are also security concerns related to Wi-Fi that could turn off some individuals
`and businesses. Hackers have been able to easily crack the basic data-scrambling
`software that comes with most wireless equipment, allowing them to snoop on private
`communications as they're transmitted through the air.
`
`But public fears could diminish as products such as virtual private networking software
`-- which provides more secure communications -- become better known. And most
`analysts predict billing issues will eventually be sorted out with roaming agreements.
`
`Some companies are trying to do this already: Boingo Wireless Inc., a start-up in
`Santa Monica, Calif., lets subscribers get online from about 1,200 hot spots --
`everywhere from Seattle-Tacoma Airport to a cafe in London's Covent Garden called
`the Internet Exchange. None of the hot spots are actually installed or operated by
`Boingo. Instead, Boingo signs up hot spots to become part of its network. Users then
`sign up for a Boingo account, which costs them a fee, from $24.95 a month for 10
`days of Net access to $49.95 for unlimited access, so that they can easily log onto the
`Net from any Boingo-affiliated hot spot. This makes life a lot easier for users who
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`http://online.wsj.com/news/articles/SB104871908296922000
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`3/6
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`BLACKBERRY EX. 1012, pg. 3
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`Anytime, Anywhere - WSJ
`9/10/2014
`might otherwise have to sign up for separate accounts at each hot spot.
`
`Still, while consumers stand to benefit from the rush of Wi-Fi technologies and
`services, there's a growing debate about how much money there is to be made in the
`market. A number of early Wi-Fi firms have failed and analysts expect to see waves of
`consolidation that will greatly thin the number of Wi-Fi companies: Cisco Systems Inc.,
` for instance, recently said it would acquire the leading maker of
`CSCO +0.50%
`consumer Wi-Fi gear, Linksys Group Inc., for $500 million in stock.
`
`New Systems
`There is also new technology on the way that promises to make it easier and cheaper
`to broadly roll out Wi-Fi networks. Most existing Wi-Fi networks consist of access-point
`antennas with a range of, at most, a few hundred feet. But tech companies are coming
`up with antennas with greatly expanded range, a development that could lead to more
`pervasive wireless coverage.
`
`Vivato Inc. of San Francisco, for instance, recently introduced a $9,000 Wi-Fi switch
`and antenna that provides indoor network coverage up to almost 1,000 feet. That
`means a company, hospital or college campus could deploy wireless access
`throughout an entire floor of a building, even through walls and cubicles, with one
`smart antenna rather than dozens of dumber ones. Vivato also plans to introduce a
`device that can transmit Internet access outdoors up to about four miles, which could
`provide blanket coverage to a neighborhood or college campus.
`
`It also means the cost of deploying a Wi-Fi network is drastically reduced. The new
`gear offers savings of 20% to 30% over the cost of conventional Wi-Fi networking
`equipment, since it also eliminates some of the labor costs of installing and configuring
`larger numbers of access points, Vivato says. Most Wi-Fi equipment, says Vivato
`Chief Executive Ken Biba, "doesn't scale very well" for large commercial-grade
`networks.
`
`Also fueling the wireless boom: Wi-Fi gear is showing up as a standard ingredient in
`more and more computers, especially laptops. Dell Computer Corp. of Round Rock,
`Texas, for one, has said that by the end of the year it will install Wi-Fi in all of the
`laptops in its Latitude line of notebooks for business users. In one of the most
`anticipated developments in this arena, Intel, the Santa Clara, Calif., company whose
`microprocessors power most PCs, recently released a package of chips for notebooks
`called Centrino that should make Wi-Fi even more common in laptops. Centrino
`consists of a microprocessor -- the chip that's the central brain of a PC -- and
`accessory chips, including a Wi-Fi transmitter.
`
`About 19% of laptop computers sold last year came with built-in Wi-Fi capabilities, a
`number expected to grow to 91% by 2005, estimates market-research firm
`International Data Corp.
`
`Wireless gear is also getting speedier this year, a development that may be especially
`appealing to business users. The 802.11b variety of Wi-Fi lets users download data at
`11 megabits per second, a rate almost 200 times faster than conventional dial-up
`modems but roughly a 10th of the speed of many corporate local networks. A newer
`version of Wi-Fi, 802.11g, provides downloading speeds of 54 megabits per second.
`
`An important feature of the technology is that it remains compatible with 802.11b
`equipment, so users of the newer gear can still connect to old equipment, albeit at
`slower speeds. Companies that serve the consumer market, including Linksys Group
`Inc. of Irvine, Calif., and Taiwan's D-Link Systems Inc., have released Wi-Fi
`equipment, hoping to appeal to users who need the extra speed for moving large
`video or audio files between computers in the house. (802.11g equipment is many
`times faster than the fastest home Internet connection, so it won't provide a noticeable
`improvement in Web access speeds.)
`
`There's just one problem with the new 802.11g gear: It's not a standard yet. While the
`industry has agreed on a preliminary version of all the technical rules that make up
`802.11g, it isn't expected to finalized those rules until later this year. That means
`products from different manufacturers that have been introduced already may not work
`with each other, nor with products released later this year. Businesses, which have the
`
`http://online.wsj.com/news/articles/SB104871908296922000
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`4/6
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`BLACKBERRY EX. 1012, pg. 4
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`

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`most to gain in the near term from the added speeds of 802.11g, "won't like that it's not
`standard," says Gemma Paulo, an analyst for In-Stat.
`
`The rush to release Wi-Fi gear based on the latest technology suggests how
`ferociously competitive the market has become -- something that benefits customers
`most of the time, even if it occasionally sows confusion in the marketplace.
`
`"Everybody wants to get ahead of the others," says Patrick Lo, chief executive of
`Netgear Inc., a Wi-Fi equipment maker in Santa Clara, Calif., which has released
`802.11g products. "Everybody thinks bringing out new generation of technology will
`give them a leg up."
`
`--Mr. Wingfield is a staff reporter in The Wall Street Journal's San Francisco bureau.
`
`Write to Nick Wingfield at nick.wingfield@wsj.com
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