Open Source business -
If the pessimism in the "new technology" sector wasn't bad enough
doubters about wireless Internet services are starting to come out of
woodwork. And some of them are blaming it all on the Open Source
If the "wireless Web" becomes a reality in the near term, it will be
to an underlying technology called WAP. WAP is short for wireless
protocol, and is a family of tools for providing a vast array of
services over wireless telephones. The idea behind WAP is to simplify
process of delivering text and graphics over wireless devices, in a
not much different than the today's World Wide Web.
A wireless web sounds pretty exciting.
Not long ago, wireless telcos were suggesting that WAP and the wireless
market was going to grow at rates that would rival the growth the Web
over the last few years. IDC, that
always-optimistic market forecaster, suggested that WAP subscribers
grow by 75% a year in mobile-phone-crazy Europe, for example.
This was good news for developers who wanted a fresh start in a market
Microsoft hadn't overwhelmed its competitors. Developers invested
in new products and services. Last year, Comdex was absolutely awash in
This new market has also attracted a rapidly growing body of "Open
WAP programs and information, most notably Kannel, and
A WAPUniverse Palm browser is
built in Open Source. Several firms like 3G
Lab, SourceGear, and
Ltd. are structuring their offerings based on Open Source
Even mainstream vendors like Nokia have been opening up elements of
The only problem has been the reality of wireless-based services. There
real differences in the kind of graphics, text and transactions that
be handled on a computer screen with an ISDN or ADSL connection, and
can be managed on a tiny monochrome telecom device using a fraction of
The market research group BMI-T
its local WAP market recently. BMI-T talked to heavy mobile users with
service. These were people who used the mobile phones almost
Yet, better than a third of them had never used their WAP service.
who had used it only about once a month, and they were generally using
to pull down the same kind of headline or stock ticker services one can
from a cheap pager. Only around 6% of WAP users ever did any sort of
over the service. Most WAP users weren't very impressed overall; the
asked respondents how they ranked the service on a scale from 1 to 10.
average response was well under 4. Markets like this don't grow very
if they grow at all.
Some companies have scaled back their manufacturing and marketing plans
demand has failed to meet expectations. Firms like the telecom
Sagem have been severely impacted. Sagem's stock price dropped a third
as investors began to panic about the prospects of the technology.
What happened? Why did so many invest so heavily in a technology that
seems so unpromising?
The oddest explanation being given for the problems with the WAP
was put forth by the Wall Street Journal. In a truly remarkable stretch
logic, the Journal suggested that the industry standards group, the WAP
was to blame, and so was the Open Source development
According to The Journal, when "the forum made WAP open-source ... it
the mis-marketing of WAP." The Journal suggested that without
code to hide behind, developers "could only differentiate themselves
packaging." By this line of thinking, Open Source was responsible for
hype that stampeded investors and developers into creating a technology
wasn't ready for prime time.
Other more rational analysts suggest the problem lies in the fact that
WAP applications ... suck.
There's an absolute glut on the market of WAP "mobile office" programs
as those developed by firms like ThatWeb.com, a subsidiary of Aztech
or Norweb Telecom. These products provide services like WAP access to
lists or provide employees wireless access to their appointments
The Brazilian airlines company Varig spent some of its investor's
on a program that would allow their customers to check the number of
flyer miles they had accumulated. It may be me, but these don't seem
"killer applications" that will do much for demand. As Charles Cousins
Psion put it, "People want useful WAP. At the moment they just get
Telecom pioneers like Sir Alan Sugar have been downright dismissive of
technology. He recently said, "WAP is a bit of a joke. The actual
is useless. It's slow and cumbersome, a small mobile phone with a small
-- it doesn't take a brain surgeon to work out that there's not much
can read on it ... Why would Mr. Average have a WAP? For paying his
bill? Why does he have to be out in the street to do it? He can do that
BMI-T did identify an application that was cause for optimism. Like
other research groups elsewhere, it found that there was a
promising market for highly localized services such as local traffic
weather alerts, and possibly other, similar "location-based services,"
as local movie times, or finding the nearest ATM machine. Some observers
that bundles of such localized services may be the application that drives
But even that discourages some analysts. The research firm Analysys is
that such services make for a very fragmented market and provides
chance for vendors to scale their services very efficiently. They warn
it will be nearly impossible for the WAP marketplace to generate any
Yahoo or AOL-type firms. While they join the optimists about the size
the market -- they see a billion subscribers by 2005 -- they think the
and established Web vendors are the only ones with deep enough pockets
make any money along the way.
Right now the biggest generator of demand seems to be
gambling. Bookmakers like
Cantor are betting their
can't stay away from the action if a WAP service is available. For
more focused on a more white-collar form of gambling, firms like
Stockbrokers are launching WAP services for those who want to engage in
trading wherever they go.
But this type of business seems unlikely to generate the kind of
that will carry an entire industry. Already major wireless providers
choking on the costs associated with acquiring the needed
spectrum licenses being reserved for broadband digital
3G broadband is needed to provide anything like useful
to consumers or business. Some licenses have been auctioned off in
of Asia and Europe recently, and the cost escalated wildly beyond
original projections, in part because of all the hype.
The result has beggared some of the vendors in Europe, and panicked
especially as the as the bad news about WAP demand has begun to filter
corporate boardrooms. Many wireless providers have begun to
scale back , either in terms of their interest in the spectrum, or
they've gone broke in the process of purchasing it, they're scaling
on infrastructure, on purchase on new, next-generation wireless
The wireless Internet is a great idea. It will probably happen sooner
later. But if it's too much later, the wireless Internet won't be based
WAP architecture. And many of the smaller, Open Source Vendors who have
on WAP might not be around, either.
NewsForge editors read and respond to comments posted on our discussion page.