WATPA: FW: Boston Globe - "'M-commerce' finds new groove"

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From: Norman J. Jacknis (norm@jacknis.com)
Date: Wed Feb 21 2001 - 23:05:53 EST


Interesting story on the next big manifestation of the Internet. (By the way, I'm also a Blackberry user.)

Regards,
Norm

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http://www.boston.com/dailyglobe2/052/business/_M_commerce_finds_new_groove+shtml

'M-commerce' finds new groove
By Diedtra Henderson, Globe Correspondent, 2/21/2001

SEATTLE - AvantGo chief executive Richard Owen sniffs that it's the ''most
antisocial'' behavior he's seen in years. Venture capitalist Brad
Silverberg notes ''signs of addiction'' and admits he'd pay top dollar to
experience the guilty pleasure.

They're talking about folks furtively thumb-typing e-mail missives under
boardroom tables during meetings or out in the open at airport waiting rooms.

Rather than a sign of the apocalypse, some say the rapt devotion owners
have to their Research in Motion BlackBerry wireless devices is a
profitable sign from the heavens amid a mobile commerce washout of biblical
proportions.

To be sure, there have been pockets of success stories like RIM's among a
jostling field of wireless content providers, handset manufacturers, and
telecom carriers. But the industry is undergoing a period of sober
introspection, a bit embarrassed by past hucksterism of the promise of
mobile commerce.

''Everybody was talking about m-commerce,'' said Keith Grinstein, Nextel
International vice chairman. ''It was the `next big thing.' I saw so many
presentations where they talked about the wireless wave and the Internet
wave. The waves would come together and, my God, we're going to be surfing
to the panacea of money.''

Wireless application protocol, or WAP, which allows users to access
information instantly via handheld wireless devices, was supposed to be the
coming standard. Now, WAP could stand for the sound of the wireless Web
concept falling flat on its face.

''I think early adopters of `wireless Web' were disappointed,'' said Andy
Kessler, a partner in Palo Alto, Calif.-based Velocity Capital Management
LLC. With WAP a flop, the industry couldn't rely on word of mouth to entice
cellphone users to upgrade to high-end phones. ''The market grew only from
new users buying low-end phones,'' Kessler said.

Even Fred Tanzella, a wonders-of-wireless poster child who fields calls
from colleagues on his cellphone inside Air2Web's Atlanta headquarters,
concedes the public is reluctant to use today's cellphones to browse the
Internet.

Tanzella's cellphone is his umbilical cord to the world. It's got a large
screen, the better to display stock results, news, weather, and sports
scores. It's great for paying bills or checking his bank balance. It's not
so hot for typing in a Web address, since he has to tap an endless string
of buttons, says Tanzella, vice president of product management.

Then, roll in the disconcerting array of security models employed by
various wireless devices around the globe.

''It's just like when e-commerce was coming to the Internet,'' Tanzella
said. ''People were afraid to put their credit cards in a browser.'' Having
no standard security on cellphones makes people a little uneasy.

''Until everything moves standardized, the uptake will be slower than
expected.''

(Air2Web, for one, has positioned itself to feel more of wireless' profits
and less of m-commerce's pains. Its chameleon applications aren't branded.
But users rely on them whether they're frequent fliers booking rooms in the
Bass Hotel chain, customers tracking a UPS package, or CBS Sportsline junkies getting a fix delivered via wireless.)

Silverberg, chief executive at Ignition Corp., an investment firm that
focuses on the wireless Internet, still sees plenty of reasons for investor
optimism.

A glass-is-half-empty person might look at stock prices at Microsoft, where
Silverberg helped transform Windows into a $3 billion business, and
announce the year 2000 was a major bummer.

But he takes the long view espoused by J.P. Morgan. Microsoft's stock has
soared 26,000 percent since the Redmond, Wash., company went public.

''That's pretty good,'' Silverberg deadpanned to a chuckling audience at a
recent conference called, ''Internet Untethered: Strategies for Success in
the Mobile Internet.''

''You can't get too high when [the market] goes up and you shouldn't get
too low when it goes down,'' Silverberg said. ''Especially if - this is
really important for us - you have a clear sense for the technological
forces that are driving change. If you align yourself with the long-term
important technological forces, if you take the long view, things tend to
work out quite well.''

What's working for wireless?

A half-billion people used wireless phones last year. By 2005, the number
of wireless subscribers is projected to soar to 1 billion. The adoption
rate is all the more staggering when you consider 47 percent of the world's
population has never made - and likely will never make - a phone call. Skim
off the poor and children younger than 10 from the remaining global
population and wireless penetration of the world's addressable market is 30
percent to 35 percent. ''It's a stunning penetration rate,'' Nextel's
Grinstein said.

All the world loves wireless. Behemoth NTT DoCoMo has turned a lemming-like
adoption frenzy into yen that fall like rain in Japan. DoCoMo's i-mode
service, begun in February 1999, has exploded, attracting 16 million users.

In Mexico and three Latin American countries, more folks use wireless
phones than wired. Europe is expected to follow suit by 2005, with more
wireless than wired connections. Throughout Asia, where waits for
traditional telephone service can run into the years, wireless is winning.

''In Japan, they don't have PCs like we do,'' Air2Web's Tanzella said.
''They do everything from their phones. Same with Korea. India's the same
way. It would be shortsighted to not see this as the next revolution, just
by looking around the world.''

Wireless gadgets are less stressful purchases for American consumers who
worry about a roller coaster stock market and a slowing economy. Amid the
slowest PC sales since 1993, the US appetite for handheld devices doubled
to more than $1 billion last year, according to NPD Intelect.

If-you-build-it-they-will-come worked for the movie and for wireless.
Presented with a compelling wireless application, crowds can congregate.

Less than two years ago, AvantGo launched a service that delivers
entertainment sites, news, sports, maps, restaurant reviews, and weather,
among other content from 650 companies on its network, to on-the-go users.

Through ''viral word of mouth,'' its customer base swelled to 1.2 million
registered users who visit up to three times per day and download 0.5 to 8
megabytes of data daily.

''The reason you can build a 1.2-plus million subscriber business without
any advertising is because you deliver what people want,'' Owen said. ''And
what people want is a rich and compelling end-user experience that's more
valuable to them than the time and effort it takes them to use it. It's
sort of obvious.''

RIM's niche with BlackBerry, in retrospect, is also rather obvious. It's an
always-on personal companion with wireless built in from the beginning,
rather than an after-the-fact add-on. Its battery lasts a month.

''The simplicity and stability of the platform, for what it does, made it a
very reliable platform,'' said Alex Slawsby, a handheld device analyst at
International Data Corp. ''It's got a niche that Microsoft and Palm have
not been able to get into.''

Even America Online recently began hawking a BlackBerry clone in the hopes
its millions of followers offer up raves, not raspberries, for the instant messaging device.

Chastened wireless executives have turned detectives, plucking from current
market winners viable seeds - such as a single device's ability to sync
data, surf the Web, and push content - that could grow into the next
generation of wireless successes.

The push to please consumers comes a bit late, but is sorely needed, says
AvantGo's Owen.

''For way too long, we spent way too much time talking to end users about
how they should be using all this technology,'' he said. ''And the answers
come back from consumers: a resounding `No, thanks.'''

Diedtra Henderson, a freelance technology writer, can be reached by e-mail
at SeattleSciGal08@aol.com.

This story ran on page E03 of the Boston Globe on 2/21/2001.
Copyright 2001 Globe Newspaper Company.


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