MIXED SIGNALS FOR WIRELESS
Predictions of a wireless world may be slightly premature, affording companies some breathing room.
Earnings disappointments and layoffs at major wireless-device makers constitute just some of the bad news emanating from a technology sector widely viewed as the next big thing. Yet all is not bleak. Leading cell- phone maker Nokia cut its projected unit sales from as many as 540 million to as few as 430 million, but its first-quarter net sales were up 22 percent over the previous year’s quarter. And wireless was the only bright spot for service providers like AT&T and Sprint, which found declines in long distance snarling their revenues.
But even as the number of wireless users grows, a new awareness is setting in. “Companies are beginning to see that wireless or mobile commerce won’t happen just because of the proliferation of wireless devices,” says John Distefano, leader of Cap Gemini Ernst & Young’s mobile commerce practice. Only 2 percent of mobile phone users pay for monthly data services, says Yankee Group, largely because downloading data onto a tiny screen is such a painful process. And Forrester Research Inc.’s recent survey of executives at U.S.-based billion- dollar companies indicates that only 9 percent have implemented any sort of wireless component to their business, while more than 50 percent were still in a wait-and-see mode, and some had no plans to pursue the technology at all.
Companies that sell wireless-related services to businesses admit to a slowdown in the wireless revolution. “We had more conversations about wireless last year with clients than we’re having this year,” says Vivek Wadhwa, CEO of Relativity Technologies, which sells software that makes data accessible via wireless devices. Reason Inc., once an online purveyor of wireless devices and services, revised its business model last fall to become a manager of other companies’ wireless devices and services. “You hear the exact same story at every company,” says Reason CEO Jeff Kohler, “and it usually comes from the CFO–they’re dealing with five service companies, 15 approved devices, and 50 rate plans, and no one knows how much money they’re spending on wireless.” Reason client Jeff Jackson, president of IT consultancy Everest Consulting Group, agrees. “Eventually, we’d like to have our field staff sharing their expertise and logging their time by using wireless applications,” he says. “But right now, we want to know how many cell phones are out there and who has them.”
That new pragmatism hasn’t killed wireless by any means, but it has prompted companies to evaluate the technology in light of their specific needs. Those with large field sales or service forces, like Everest, can achieve measurable results quickly. Cap Gemini’s Distefano says that a global beverage manufacturer with which he is working has found that the faster it can fix soda fountains, the more soda it can sell. Equipping its technicians with wireless devices so they can reach broken machines and order new parts immediately, then, should translate directly into higher profits.