HNS Rides The Wi-Fi Wave
Germantown, Md.-based Hughes Network Systems is looking to ride the growth of Wi-Fi (wireless fidelity) services by providing connectivity to retail establishments that offer the service in addition to their typical fare of gourmet coffee, books or desserts.
The trend of providing Wi-Fi capabilities in stores already has included Starbucks and other coffee shops as well as national bookstore chain Barnes & Noble. HNS says retailers can use the availability of Wi-Fi services to gain a competitive advantage against their marketplace adversaries in catering to customers interested in Internet access.
The market potential is huge. The carrot? Analysts forecast the number of Wi-Fi “hot spots” in the United States is expected to grow to more than 20,000 in 2004. In addition, more than 64 million Wi-Fi systems might be sold in 2004, up from 24 million in 2002, according to research firm IDC. The stick? The early stages of pursuing the opportunity involve hefty costs rather than profits.
A large segment of the user market involves local travelers who take business trips by car within 100 miles of their homes. Such travelers account for 89 percent of all U.S. business trips, and they could be served well by Wi-Fi services offered through connectivity providers, market analysts estimate.
ForceNine Consulting says that, by 2010, the U.S. public-Internet access market will consist of 27 million hot-spot users generating more than $9 billion in annual revenue. Aside from HNS, the public hot spot market in the United States is served by predominantly by wireless carriers T-Mobile, Sprint PCS [FON] and Verizon Wireless. The trend of creating devices with hot-spot functionality is expected to continue until almost every new computing-product is wireless-enabled, said Jim Gandolfi, the HNS senior vice president who heads its Wi-Fi program.
The proliferation of U.S. hot spots is aided by increased dependence on electronic information from our mobile society and public acceptance of the availability of hot spots, Gandolfi added. The 2003 rollout of computer chip giant Intel’s new Centrino chipset brought wireless functionality to new computer products ranging from laptop computers to other Web-enabled devices. “There are a lot of opportunities,” Gandolfi said in an interview.