May 25, 1999 6:15 PM PDT

Study: Wireless data poised for growth

The number of subscribers using wireless data services in the United States is expected to grow tenfold over the next four years, according to a new study.

Although only about 3 million people will subscribe to a wireless data service this year, more than 36 million are expected to subscribe by 2003, making the market worth about $3 billion, according to a Dataquest study. There were 1.4 million wireless data subscribers in 1998, according to the market research firm.

Other recent studies show the overall wireless market, including equipment, voice, and data services, is expected to grow substantially over the next several years. Analysts also expect mobile handset sales to outpace personal computer sales in the next few years.

But many industry observers have long forecast a wireless data boom--which has yet to materialize--leading some analysts to offer more cautious predictions.

"[Wireless data] is not going to take off for at least two years," said Abhi Chaki, a telecommunications industry analyst for Jupiter Communications. "People in this country are just not used to using wireless for data, but people in Europe and Asia zap things around all the time."

Dataquest wireless industry analyst Naqi Jaffery said multiple proprietary technologies deployed at various frequency bands have prevented widespread adoption of wireless data services. "What is happening right now is that most of those impediments are going away," he said.

The adoption of digital wireless technologies and upcoming high-speed data transmission capabilities will contribute to the expected growth, Jaffery said. Two-way paging and short messaging service (SMS)--brief messages of about 100 to 300 characters--will be among the fastest growing areas of wireless data, he added.

Nearly 67 percent of all wireless data subscribers will use SMS while 19 percent will use two-way paging, the study showed. Last year, 38 percent of wireless data subscribers used circuit-switched data services while 31 percent used SMS services, Jaffery said.

Jaffery said the majority of wireless data users will continue to be mobile professionals and high-end users, not mass market consumers, and that many also will use wireless services to access corporate LANs and workgroup servers.

Companies such as WirelessKnowledge, the wireless communications joint venture between Microsoft and Qualcomm, are targeting the wireless workgroup market.

WirelessKnowledge yesterday added Metricom, provider of the Ricochet wireless service, to its stable of partners. WirelessKnowledge now has ten service provider partners and expects to begin offering its Revolv wireless data service this summer.

 

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