Armed with a new reference design for handset makers, key technology players are making a big push to get mobile phones that work over wireless local area networks, or Wi-fi, adapted for the mass market. But industry experts predict these dual-mode handsets will remain a niche market over the next few years, with enterprises as the main customers. For mobile network operators, the debate over the future of cellular/Wi-fi handsets seemed to grow louder this month when the semiconductor unit of Royal Philips Electronics announced a complete unlicensed mobile access (UMA) chip reference design for handset manufacturers. That development provides a blueprint to create GSM and GPRS mobile phones capable of automatically switching over to Wi-fi access points. If a phone is taken out of the Wi-fi range, it seamlessly switches back to the mobile network. 'Philips is taking a significant step to increase solutions available to the connected consumer,' said Paul Marino, vice-president and general manager for business line connectivity at Philips Semiconductors. 'We are looking at all mobile phone makers as potential customers.' Mr Marino said Philips was working closely with Alcatel on interoperability tests between handsets based on the Philips Nexperia 6120 UMA reference design and Alcatel's 5020 Spatial Atrium mobile call server/softswitch. The Alcatel system enables service providers to extend customer roaming capabilities as they switch between cellular networks and Wi-fi access points. Philips' UMA reference design, based on the 802.11g standard, is supposed to enable mobile phone users to access voice, data and multimedia services through Wi-fi networks up to five times faster than current 802.11b standard products, without compromising the battery life of mobile phones. Still, Robin Simpson, Gartner research director for mobile and wireless systems, downplayed the reference design's mass-market potential. He said: 'Operators will hate this idea. There is no economic business model to make this work.' Mr Simpson said offering voice over Wi-fi would eat up into operators' lucrative mobile voice minutes. He noted it would be an additional financial burden for operators to rollout Wi-fi networks, adding third-generation networks have become more cost efficient to handle their voice and data traffic. Voice over Wi-fi handsets, based on the 802.11b standard, have been shipping worldwide since 2000, with adoption led by the manufacturing, retail, health care, ware-housing and distribution, and education sectors. SpectraLink and Symbol Technologies have spearheaded the creation of that niche market. 'There are technical issues to be worked through before wireless internet calling becomes viable commercially, such as quality of service, roaming across different wireless platforms, and also the relatively short range of Wi-fi signals,' said Britain-based Infonetics Research analyst Richard Webb.