Quocirca's Straight Talking: Wi-Fi on smart phones a smart idea?

Or just another silly scheme?

Could the integration of Wi-Fi into smart phones be the dawn of a new age, the beginning of the transition from cellular to 802.11 networks? Or is it just the latest twist in the tale of competing network standards?

These network standards have been evolving side by side for a while now, all the time not quite stepping on each others' toes, but clearly with inherent potential to both complement and conflict with each other. Development of the standards themselves has been driven by different parts of the communications and IT industries with agendas that were always going to overlap.

The 802.11 standard - also known as Wi-Fi - has gone from strength to strength over the past few years, with a little help from Intel. Wi-Fi hotspots are springing up at a quick rate. The majority of laptops sold and an increasing proportion of PDAs now support Wi-Fi. Is it therefore just another evolutionary step for smart phones to support Wi-Fi too?

You have to ask yourself, though, what does Wi-Fi add to a smart phone that you couldn't get already? From a connectivity perspective, Wi-Fi has the promise of being much faster than any GSM/3G alternative available now or in the foreseeable future. Also, Wi-Fi is not subject to the latency you experience when using GPRS, so regardless of the download speed Wi-Fi will always feel much more reactive than cellular options.

At the same time it is important to consider the realistic constraints of the present and next generation of smart phones. These devices have small screens. Data input is hampered by their equally petite keypads and memory capacity is still limited.

Is it possible to do justice to a Wi-Fi connection on such a device for the use of mobile data? You could stream video or high quality music on this kind of connection, but smart phone are business devices and according to Quocirca's research, enterprises do not require these types of high-bandwidth services. The question therefore remains - what is the point of Wi-Fi in smart phones?

The only other bandwidth-hungry mobile application that may be attractive to business users is voice, as provided by voice over IP (VoIP). The most notable example of the Wi-Fi/VoIP combination comes as a result of the Motorola/Avaya/Proxim alliance. Their proposition is to use Wi-Fi in the campus or office environment to route mobile calls over a non-GSM network for cheaper calls via an enterprise PBX or similar. The plan is particularly pertinent as Motorola is soon to release the MPX, a smart phone supporting Wi-Fi.

BT's Project Bluephone also mixes Wi-Fi and voice. This service will, when it launches, provide relatively inexpensive calls while the device is connected to residential broadband via Bluetooth. In the future is will be able to place calls via a Bluetooth LAN in an office environment and roam onto GSM when out of that network's range. BT has already acknowledged it will incorporate Wi-Fi to complement Bluetooth in due course. BT's justification for starting with Bluetooth rather than Wi-Fi is the relative immaturity of Wi-Fi in a mobile device. The Wi-Fi components in these devices are far less efficient than the incumbent radio technologies and therefore dramatically reduce battery life. This is expected to change as the integration of Wi-Fi into smart phones becomes tighter, but not for a year or so.

As these approaches start to become reality it is clear that PBX voice traffic is going to become the target for a variety of propositions, including those from mobile operators. Only recently, Vodafone launched its 'perfect fit' pricing policy for businesses, which offers free calls between a firm's mobiles and to its landlines. Quocirca expects it won't be long before other mobile operators follow suit.

If poaching PBX voice traffic really is a key driver for the integration of Wi-Fi into smart phones, the paradigm is going to be born into a highly competitive market with fixed line operators, mobile operators and telecommunication equipment vendors all fighting against one another in a way that has probably not been experienced before. There will be only one victim: the price of voice.

Voice will undoubtedly become the sacrificial lamb as the battle over connectivity rages. Those who can offer the best range of seamless connectivity, with the best tariffs and billing, combined with value-add offerings will lead the way.

In the end, whether Wi-Fi will become ubiquitous in smart phones will be driven more by the needs of the enterprise rather than by the consumer. However, if enterprises do start to demand Wi-Fi in smart phones and PDAs, the handset manufacturers will start to build it into all of its product lines - including the consumer ones - to gain economies of scale.

As the VoIP battles intensify, Wi-Fi will have its part to play - and this could cause an inflection point in how the handset manufacturers and operators regard the market.