IDC: Wi-Fi hype contrasts with reality

Analyst firm IDC threw some cold water on the hotspot hype this week, predicting that although worldwide commercial Wi-Fi locations are set to grow 57 percent annually over the next five years, the market is still young and rife with uncertainty.

In a summary of a report released Thursday, IDC analysts likened the hotspot market to a "technology gold rush" and warned that despite promises it is still in the early phases of deployment. Most business models are not yet proven and the competitive landscape is very unclear, Keith Waryas, research manager or IDC's Wireless Business Network Services program, said in a statement.

The firm predicted that the Wi-Fi market would evolve in two stages, with an emphasis on network expansion over the next two years, followed by three years of relationship building amongst carriers. During the second phase, carriers will make network roaming agreements and partnerships that will be essential to filling gaps in their individual networks, IDC said.

Still, the market could offer some sizzling revenue opportunities. IDC estimated that Wi-Fi revenue streams would grow 143 percent annually over the next five years , while the number of users is due to double each year over that same period. By 2008, hotspot users will approach 25 million, IDC said.

IDC, in Framingham, Massachusetts, is a division of International Data Group Inc., parent company of IDG News Service.

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