What's So Wild About Wireless?

Mention the words "wireless Internet" to anyone developing a Web strategy, and it's as if you had shouted "free beer" at a fraternity party. There's an outright giddy enthusiasm about the business opportunities that will arise as millions of Americans use cell-phones or other wireless devices to go online anytime. Look at Asia and Scandinavia, where wireless Internet use is the highest, the argument goes. Then imagine what could happen if the usage patterns in those regions were grafted onto the huge U.S. economy.

Consultants predict that revenue from wireless e-commerce in North America will soar from an insignificant base this year to $32 billion or more by 2004. Already it's impossible to read a newspaper, watch TV, or zip through the morning's email messages without confronting ebullient ads meant to drum up that growth. Sprint PCS, for example, has been buying full-page ads in the New York Times, showing office courtyards illustrated with black circles drawn around the unexpected places that people could use Sprint's wireless-Web connections. "Want to make your business more productive?" the ad reads. "Take your office with you."

Wireless-Web technology, like all great Internet breakthroughs, is surrounded by hype: roughly two-thirds sense and one-third nonsense. Companies such as Amazon.com, Microsoft, and Yahoo! are putting some of their brightest people to work on wireless-Web projects, on the belief that wireless technology will ultimately become a vital new way to use the Internet. Early consumer response is promising, they say. But there are also plenty of snags, unresolved issues, and -- most important of all -- signs that more than a few of the initial ideas about wireless-Web usage are just not going to pan out.

Haven't we seen this before? Just two years ago, prospects for dotcom retailing seemed so dazzling that every venture capitalist wanted to finance a dozen deals. Everyone that owned a funky domain name thought that they owned a million-dollar property. Every company that said it was going to start selling its merchandise over the Web could watch its stock soar. That all-out mania concealed a lot of sloppy thinking. As real as the potential was for consumer-oriented e-commerce, the opportunities weren't limitless. And all the basics of sound retailing -- inventory management, gross margins, customer service -- still mattered. Companies that understood this went on to thrive; those that didn't soon lost their allure and often ended up busted.

In the wireless world, Internet enthusiasts understandably are excited about the many implications of being connected anywhere at any time -- be it at a restaurant, in a car, or at the beach. Yet they tend to gloss over the severe limits of today's devices -- which even future improvements aren't likely to eliminate. Small screens make it impossible to display much data at once, which forces users to scroll down endlessly. And tiny keyboards turn even the most rudimentary amount of typing into an unpleasant chore.

Those drawbacks mean that the wireless Web is best suited for quick, urgent tasks -- not for wide-ranging projects that require 30 minutes online. "What you really want are tasks with an imbalance of input and output," says Terrell Jones, 52, CEO and president of Travelocity.com Inc., the Dallas/Ft. Worth - based online travel service. "You put in a little amount of data, and you get back a lot." Jones says that he likes to use a Web-enabled cell-phone to check plane flights, stock quotes, and movie listings. All those uses meet his criteria. But many of his other Internet-related activities just don't transfer to a wireless setting.

Similar distinctions are likely to emerge in wireless e-commerce -- which wireless-Web enthusiasts right now see as a can't-miss area. Seattle-based Amazon.com, the leading retailer on the Internet, has been trying its hand at wireless commerce since late 1999, both via cell-phones and handheld personal digital assistants (PDAs) such as Palm or Handspring devices. Amazon's guarded enthusiasm is instructive for anyone who has big dreams of booking orders over the Web.

"Over time, it's going to be a tremendous new channel," says Nayeem Islam, 37, the general manager of Amazon Anywhere. "But getting the user interface right is quite a challenging task. There just isn't that much screen real estate." To save space, especially on cell-phone display screens, Amazon leaves out product photos and detailed reviews, which have helped the company earn its cachet for great service among desktop-Internet users. Instead, users get a bare-bones listing and must click to access more information.

So far, Islam says, Amazon's wireless orders have tended to tilt heavily toward gifts and impulse purchases. That's fine, but it means that Amazon isn't getting the big 15-item orders that come from desktop users who are willing to spend 20 minutes doing some serious shopping. As a result, Islam says, the average wireless order is smaller than its desktop counterpart. He won't say by how much.