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Net and wireless: will they click?

Everyone at the Wireless 2000 show in New Orleans last week was buzzing about wireless meeting up with the Net. But will it be a smooth summit or a head-on collision?

Everyone is talking about wireless meeting up with the Internet, and the buzz was deafening at last week's Wireless 2000 trade show in New Orleans. Executives of marquee companies were hot to make predictions, but whether the meeting between the two will be a smooth, peaceful summit or a head-on collision remains to be seen.

"If you look five to 10 years out, almost all of e-commerce will be on wireless devices," said Jeff Bezos, founder and chief executive of Amazon.com, which counts 17 million customers.

Amazon has inked deals with wireless operators, including Bell Atlantic Mobile and Sprint PCS, to offer up site access to wireless customers. "Today our revenues from wireless are minimal, but in a few years it will be mostly from wireless," Bezos said.

Compaq Computer chief executive, Michael Capellas, predicted that within four years, 60 percent of calls will be made on wireless devices. Capellas also said he thinks a black cloud will fall on the fully configured PC, which will be replaced by mobile Net devices.

In order to cash in on the gold rush to wireless Net applications, a climate of cooperation has developed between unlikely partners. "Carriers don't want to be just a pipe or just the infrastructure anymore," Bezos said.

Thus Microsoft, for example, announced deals with wireless provider NexTel Communications and Vodafone AirTouch (quote: VOD) to offer its MSN Mobile 2.0 service. America Online (AOL), trumpeting its AOL Anywhere, has made deals with Sprint PCS and BellSouth, among others. Such companies will continue to make wireless deals to provide more avenues for their content.

"We want to work with carriers in any way as opposed to trying to recreate what's been built over the years," said AOL's chief executive, Steve Case. "Anyone thinking they can do this alone is making a huge mistake."

This will further blur the lines between the operators, industry experts said. In three to five years, it will be hard to distinguish an Internet company from a wireless one, said Alain Rossman, president and chief executive of Phone.com and founder of the WAP Forum. WAP, or Wireless Application Protocol, allows complex mobile phone-based transactions.

There may, however, be some disagreement on the path to wireless Internet nirvana. For one, partnering could cause a tug-of-war for ownership of the customer. Others have differing ideas about billing models. Bezos, for example, said that in order for wireless Internet services to truly penetrate the mass market, wireless operators must implement flat-rate pricing. "Flat-rate is what drove the adoption of the Internet. It will be a huge win, not just for customers, but for companies involved," Bezos said.

The alternative billing model that could be favoured by wireless operators as they move from circuit-switched networks is billing "by the bit". But Bezos said that would be too confusing for an end user: "How many bits would it take to buy a book?"

Rossman said a key element to making the wireless Internet work is keeping platforms non-proprietary. "That platform must be open and used in an open way so third-party developers can create a market value for the network," he said. Rossman admitted that Phone.com's acquisition fever -- it has bought three companies in the past 90 days -- could help the company become an Internet service provider (ISP) itself.

However, one of the biggest causes of delay for wireless Internet services has been pinned on the WAP-enabled phone, which isn't due on the US market until late next year. Without it, wireless e-commerce is still largely incommunicado.

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