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SCMP Reporter

Many of the world's phone companies have bet the shop on third generation mobile networks, but with a possible price war in the hand-held market and reluctance to actually risk rolling out services, 3G is beginning to look like a mirage.

Meanwhile, wireless networking is looking a lot more viable.

Palm and Handspring have come in for much criticism for their sloth-like pace of evolution. But their competitors have not been so slow.

Hewlett-Packard, the leader in Microsoft's Pocket PC segment, yesterday promised to have a Palm-priced iPaq on the market in time for the holidays.

Until now, the price of Pocket PCs has been high enough to leave the low end to Palm, but even that market is now under siege.

Viewsonic has just released a US$299 Pocket PC, and after years of dismissing the niche as irrelevant, Dell now plans to enter the fray as well.

I've spent the past week in the company of the Audiovox Maestro, a Pocket PC device that is basically a re-badged Toshiba. Again, the price is around US$300, putting it squarely in the Palm field.

Audiovox is also marketing a GPRS adaptor that plugs into the Maestro's Compact Flash slot, turning the device into a phone and always-on mobile phone.

But like so many new technologies, GPRS is beyond the budget of most of us.

Wireless is not. Sony yesterday announced the latest in its Clie range of Palm OS devices. Though the new hand-held comes with a daunting price-tag - US$599. Sony is clearly eyeing the wireless market.

The new Clie has two radical new features that no other Palm devices offer - a 200MHz Intel processor and a PC Card slot for wireless Lan.

The latter makes it clear how urgent the wireless issue has become. Until now it would have been unheard of for Sony to include anything other than a MemoryStick slot. But Sony obviously could not wait.

Most phone vendors are fond of pointing out that the handset market is vastly larger than the market for PDAs.

This is true, and given the choice of carrying one device or two, most consumers will continue to buy a vaguely intelligent phone rather than a PDA. But, unfortunately, those users are not the initial target market for 3G.

The early adoptors would be the same people who are always targeted as early adoptors - the technology-savvy professionals who are already taking an interest in wi-fi.

Some analysts say the drivers of 3G will be Girls, Games and Gambling. But with current 2G handsets, none of those are viable businesses. Wap sites are few and far between, and navigating them is an expensive chore.

The most successful weapon in the mobile carriers' armoury has been messaging. Short Message Service has become a superb source of income. Getting five messages per kilobyte and charging a minimum of HK$1 per message, the carriers can make HK$5,000-HK$10,000 per megabyte just on local SMS messaging. International SMS can cost 10 times as much.

This gives the carriers every reason to ignore 3G and concentrate on wringing revenue from the mid-market.

Or they could do what PCCW has done, and get out of the market entirely.

PCCW, through its Netvigator Internet arm, has been actively fostering a local wi-fi community. The company has already installed 802.11b wireless networks in 100 hotspots around Hong Kong. Its roaming agreement with iPass means that whether you're in San Francisco, London or Singapore, all you need for broadband Internet access is a wireless card, and computer.

Netvigator is only dipping its toe. In Taiwan, Eastern Multimedia and Yaw Jenq Technology are building a city-wide wi-fi network that could render the city's 3G plans obsolete. The danger for Netvigator is that wireless roaming may still not be a sure way to keep those customers.

With a laptop or wireless PDA, you just need to install a copy of Netstumbler to sniff out a free network; and even in Hong Kong, there are plenty of them. In San Francisco, volunteer networks cover virtually the entire city. And with instant messaging software, 200 byte SMS messages look rather expensive.

A combination of the phone firms' greed and the growing availability of wireless access leaves a massive question-mark over the point of 3G.

Because many of the mobile networks' most valuable consumers are now getting their Gs on wi-fi.



Wi-fi network stamps a gigantic question mark over 3G