March 10, 2000 12:20 PM PST

IBM reveals wireless notebook strategy

RALEIGH, N.C.--IBM may be coming to the wireless party late, but analysts say its long-term strategy and broad experience could easily propel Big Blue past competitors.

Starting next quarter, the company will unveil a series of new wireless enhancements to go along with IBM's successful ThinkPad line designed to catch competitors and move ahead of them.

"It's strategic for IBM, like everyone else, to go for wireless, but their problem is they want to have all the pieces in place before moving forward with new technologies," said Technology Business Research analyst Lindy Lesperance. "But for the first time, there are signs this is changing."

In May, the company will debut notebooks containing the Portofino port, a connection for snapping in wireless modems, cameras and other devices.

By the third quarter, IBM plans to sell a variety of new products for notebooks and Palm handhelds featuring Bluetooth, a radio frequency technology that simplifies wireless communication. With Bluetooth, for instance, a notebook does not need a wireless modem or independent wireless ISP account. Instead, data from the notebook can be sent by radio to a cell phone, which can then transmit the data.

The computer maker also is working with third parties hoping to offer wireless Internet access and networking in airports and hotels.

Apple Computer, Compaq Computer and Dell, which all sell wireless networking options for notebooks, have the lead over Armonk, N.Y.-based IBM, say analysts. Products from those companies let notebook users connect to network servers and the Internet unfettered by wires--a competitive advantage, for example, in selling to schools and colleges. Still, it's hard to sell Big Blue short.

"IBM is way behind on wireless with both Compaq and Dell ahead of them," said Gartner Group analyst Ken Dulaney. "It's just passiveness on IBM's part, and I don't think their European division has beat them up enough."

Demand from Compaq and Dell's European divisions helped get the companies on the move into wireless, said Dulaney, who pointed out the technology is more widely adopted there than in the United States

IBM's biggest obstacle Wireless takes center stagemaking wireless work is its typically lumbering approach to developing new technologies.

Jonathan Prial, IBM's marketing director for pervasive computing, said the company has taken an "erector set" approach to wireless, applying existing technologies to new situations and depending more on third parties to fill in crucial gaps.

This includes adapting the ThinkPad 560 into a wearable PC and making major wireless partnerships with AT&T, Nokia and Sprint, among others. But many recent deals have been strong on promise yet short on delivery of products.

IBM's biggest area of catch-up is delivering products around the IEEE 802.11 wireless local area network (LAN) standard. Notebooks equipped with IEEE 802.11 network cards, for example, can connect wirelessly to transceivers, or access points, attached to corporate networks.

During the second quarter, IBM plans to begin selling a wireless LAN card and access point comparable to a similar product available from Dell. The PC card is expected sell between $175 and $250 and the access point close to $1,000.

"We're going to take it one step further," said Ron Sperano, IBM's program director for mobile market development. We are working with companies that provide remote wireless local area network access."

These partners, which include MobileStar, plan to offer wireless networking access ports in airports and hotels. Frequent travelers could subscribe to a service that would provide wireless Internet access and with VPN connectivity to corporate networks.

Some analysts think IBM's late entry into the wireless networking game may not be a problem and that extended partnerships, like wireless access ports in airports, could give it an edge.

"IEEE 802.11 is all a lot of marketing hype, because the adoption rate of that technology is very low," said International Data Corp. analyst Katrina Dahlquist, although she admitted Apple was having modest success. "They said that about 20 percent of the iBooks they're selling have a wireless card, which is the biggest installation I have heard of."

Bluetooth, which IBM backed early along with Ericsson, Intel, Nokia and Toshiba, may be its golden ticket to the Wonka wireless factory, say analysts.

"In terms of Bluetooth, IBM is at least on par with competitors and in many respects is way ahead," Dahlquist said.

In May, IBM will start to clear the way for Bluetooth with new ThinkPads, featuring a multi-function port on the top edge of the lid. Code-named "Portofino," the connector will support a new line of PC cameras and Bluetooth transceivers, among other devices.

During the third quarter, IBM plans to release a Bluetooth PC card for older ThinkPad owners and a Bluetooth transceiver that snaps onto newer models. Big Blue will also unveil a Bluetooth modem for Palm devices.

"The goal is to get to an integrated Bluetooth radio and antenna, and clearly that is our attention for both ThinkPad and WordPad as IR is integrated today," Sperano said. But it could be sometime before the technology is cheap enough to make this feasible, he added.

Part of Bluetooth's allure is ease of use. Devices and peripherals using the technology automatically connect within a proximity to each other. IBM believes this will be useful for three initial target markets: education, retail and medical.

IBM, for example, is negotiating long-term strategic partnerships with several retailers that would like to wirelessly transmit sales and other information to shoppers' Bluetooth-enabled devices.

The computer maker also envisions doctors using Palm or WorkPad handhelds containing patient charts that would automatically update when approaching a nurse's station.

While these grandiose plans are great for the future, Bluetooth's early use will be more simple: "Basic cable replacement is where Bluetooth will first reach critical mass, replacing my printer, keyboard, camera and cell phone cables, among others," Sperano said.

 

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