WiFi bubble set to burst

Things tend to move quickly in the wireless local area network (WLAN), or WiFi, market. And not only data.

The technology was barely spoken about before 1999, but since then it has been through a period of deregulation, supplier and service provider land-grab, rapid consolidation and dramatically falling prices, and has finally emerged in 2003 as a must-have technology for travelling businessmen and women. In short, WiFi has lived through every major event that occurred in the 30-year-old mobile-phone industry, but in just four, dizzying years.

The backlash has set in early too. Analyst firms have been falling over themselves to declare the bursting of the WiFi bubble, citing slow sales of WiFi devices, spotty coverage, even flakier roaming and fewer-than-expected subscribers of public WiFi service providers.

"It's as if the dot-com boom and bust never happened," says Forrester analyst Lars Godell. "Much of the money being poured into public WLAN is being wasted." Worse, Gartner says that WiFi is about to tumble from its famed 'peak of inflated expectation' into its equally notorious 'trough of disillusionment' – analyst-speak for a classic boom-and-bust cycle. "We have not yet found a sure-fire model for turning user numbers into cash," says Ian Keene of Gartner.

This is not only bad news for the likes of BT, Intel and Starbucks – all early advocates. It also raises questions about the desire of ordinary business people to embrace mobile working.

While some IT directors are undoubtedly buying into the WiFi proposition, many others appear to be waiting for prices to stabilise and WLAN technologies to be standardised before they jump in.

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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