United Parcel Service plans to spend US$127 million on global deployment over the next five years of a new driver terminal that features built-in cellular, wireless LAN and Bluetooth short-range wireless systems.

The driver terminal also includes Global Positioning System (GPS) receivers and a bar code scanner all packed into a compact, rugged Windows CE .Net powered device with a color screen manufactured by Symbol Technologies.

UPS also spent $22 million to develop its new Deliver Information Acquisition Device (DIAD) IV that will equip 70,000 drivers worldwide, according to spokeswoman Donna Barrett.

The new terminal hooks drivers into the UPS worldwide network from a customer's premises, allowing entry of package tracking data into the network without the need to walk back to the truck and hook up the terminal to a wide-area wireless network, which drivers need to do with the current-generation systems, Barrett said.

The new terminal also confirms deliveries almost instantaneously: Drivers scan the package bar code; collect the receiver's signature electronically; type in the last name of the receiver and push a single key to complete the transaction and distribute the data, UPS said in its announcement.

"This electronic data capture ensures that UPS customers have the most current package tracking information available to them anytime, anywhere," UPS CIO Ken Lacy said in a statement.

Dave Salzman, UPS program manager for information services, said the short-range Bluetooth wireless system in the DIAD IV is designed to communicate with peripheral devices that the company may add in the future, including printers and credit card readers.

UPS also plans to use the Bluetooth system, which operates in the same 2.4-GHz band as 802.11b WLANs built into the DIAD IV, to communicate with customer computers that use UPS shipping software and also have Bluetooth wireless connections, Salzman said. He added that one reason UPS chose the .Net version of the Windows CE operating system from Microsoft was it supported XML messaging, which will make it easier for the DIAD IV to communicate with customer PCs.

The built-in 802.11b WLAN system will be used for in-building communications with WLAN systems installed in UPS stations and hubs, Salzman said. In October 2000, UPS detailed plans to install WLANs at all 2,000 of its sorting facilities worldwide.

The DIAD IV, which UPS plans to start deploying nest year, replaces the DIAD III introduced in 1999 at a cost of $100 million and manufactured by Motorola. The DIAD III had a black-and-white screen and operated over a wide-area packet data network in the U.S., with a data rate of only 9.6Kbit/sec.

The DIAD IV, Barrett said, will operate over cellular networks based on the General Packet Radio Service (GPRS) standard that have a data rate of 20Kbit/sec. to 40Kbit/sec. or Code Division Multiple Access (CDMA) 1xrtt (single carrier -- 1x -- radio transmission technology) networks that have an average data rate of 40Kbit/sec. to 60Kbit/sec.

UPS started a large-scale test of a GPRS network operated by AT&T Wireless Services, with 4,500 DIAD III terminals earlier this year. Last year, UPS completed an upgrade of 15,000 DIAD IIIs used by its drivers in Europe to use a GPRS network operated by the T-Mobile division of Deutsche Telekom.

Barrett added that UPS has not yet signed a long-term contract with AT&T Wireless pending the results of the tests. UPS intends to use CDMA networks to provide coverage in areas not served by GPRS systems, Barrett added.

UPS rival FedEx started a rollout of a similar driver terminal based on the Pocket PC operating system last fall in a $150 million project designed to equip 40,000 drivers. The FedEx "PowerPad" operates over the AT&T Wireless Services GPRS network and also incorporates Bluetooth technology as well as a built-in 802.11b wireless LAN system. But it doesn't have a built-in GPS like the new UPS DIAD IV.

Barrett said UPS initially intends to use the GPS technology to aid dispatchers in Europe, where the company responds to calls for pick-up vs. the U.S., where the company has scheduled pick-ups on a daily basis at known customer locations. The DIAD's GPS receiver will transmit vehicle locations back to the dispatch center over the GPRS network, allowing dispatchers to quickly determine the vehicle nearest to a call, Barrett said. The DIAD IV has 128MB or more than 20 times the memory in the DIAD III -- a portion of which could be allocated to store maps for use with the GPS system at some future time, Barrett added.

Ken Pasley, director of wireless system development at FedEx, said that while his company uses GPS on long-haul trucks, the company had dismissed the idea of putting it into the PowerPad because of loss of coverage from the GPS satellites once a driver entered a building.

Pasley also said that FedEx eventually will be able to use cellular network-based location systems in the U.S., once the cellular carriers have rolled out the federally mandated service nationwide.

Salzman said that UPS doesn't need to track a driver inside a building, but just to the driver's last stop location. He added that the cost of adding GPS capabilities to the DIAD IV was "incremental."

Pasley also disclosed that FedEx is considering using CDMA cellular service in addition to GPS in the U.S. to improve coverage and is looking for the industry to develop a chip-based GPRS/CDMA system.

Chris Kozup, an analyst at Meta Group, said UPS and FedEx continue to lead the way with integration of wireless in vertical, enterprise markets.

"UPS and FedEx have always been innovators, and they are now pioneering the integration of multiple wireless technologies" into a single device, Kozup said. He said UPS needs to stay ahead on the technology curve because many of the concepts and business applications it pioneered, such as automated package tracking, have been adopted by rivals, including the U.S. Postal Service.