Is a WAP vs. I-mode Showdown Looming?

With the popularity of wireless technology growing at a steady pace in the region, analysts have observed changes in the teething problems the industry faced a few months ago.

"There is clearly increasing pressure on WAP (wireless application protocol)," said Bertrand Bidaud, director of Asia-Pacific telecommunications for Gartner Group Inc. "(NTT DoCoMo Inc.) is pushing very hard to impose I-mode as an alternative to WAP."

A proprietary standard for wireless data communications developed by NTT, I-mode is the predominant platform for wireless Internet services in Japan.

According to Bidaud, I-mode could gain notoriety outside Japan and become adopted as the international wireless standard if users don't adopt WAP quickly enough. "We might see a market shift," Bidaud said. "So the next six months is really critical for WAP."

However, Sandra Ng, vice president of communications and peripheral research at IDC Asia-Pacific, said that although demand for I-mode might pick up outside Japan, it is unlikely it will take off faster than WAP.

"It took quite some time for WAP to gain (public) awareness, so I don't see how I-mode can do it overnight," Ng said. "Definitely, (I-mode) is going to be a powerful standard, if it indeed becomes an international standard."

Ng attributed I-mode's success to Japan's critical mass. "Japan works differently from the rest of the world because they have over 120 million people and have enough domestic demand (for wireless Internet services)," she said.

WAP services, Ng noted, are now taking significant strides forward compared to six months ago, when the lack of content and the lack of knowledge of WAP in the mass market stifled its growth.

"Things are definitely picking up in terms of the deployment of WAP services," Ng said. "Carriers are all putting in the infrastructure and they're offering commercial services. It's now a matter of bringing the awareness to the next level."

According to Ng, there will always be the question of whether applications and content for WAP services will be sufficient. Another issue of concern, she added, is the availability of WAP-enabled phones.

"Increasingly, there are more handset vendors coming up with new models (of WAP phones)," Ng said. "But by the end of this year or early next year, most vendors will have a whole series, so practically all phones will be WAP-enabled."

Bidaud agreed, adding that an acceleration of the market is expected, as more applications and terminals come into the market very quickly. "I expect this to happen, so it's not exactly all doom and gloom (for WAP)," he said.

However, Bidaud pointed out that wireless computing in the region should escalate even faster, particularly in Hong Kong and Singapore, which "are far below their potential."

"In many markets we are at the low point (in adopting WAP) and we should move up," Bidaud said. "It has to move up within the next six months or the key players will be impacted, because there is a lot of money at stake."

IDC's Ng was optimistic that the growth of wireless services will boom as the penetration of cellular subscribers has increased rapidly. "There are at least two to three times more cellular subscribers than PC users," she said.

Ng added that she doesn't foresee the wireless trend slowing down any time soon. Instead, she said that with improvements made to increase the number of WAP portals and content, demand will continue to grow.

"It's like the chicken and the egg scenario," Ng explained. "If you have content, then you have subscribers. And if you have a lot of subscribers then you have a lot of content ... so if we wait longer, we will see more content, more devices, and more subscribers."

The adoption of wireless services, according to Ng, will further spur Internet usage. She added that increased demand for wireless computing will also increase with the development of new applications.

"With GPRS (General Packet Radio Service) coming in, there will be an explosion of wireless data, because it's going to be faster than desktop narrowband," Ng said. "A lot of carriers are already putting on trial GPRS, so I'm sure that commercial services will be available first half next year. It just now waits for the GPRS handsets to be available."

Turning to China, Bidaud suggested the trials for WAP in China "haven't been very good" but he said that it might be premature to make a judgment on future wireless uptake there.

"The problems faced (in China) are the usual problems (with WAP)," Bidaud said.

He added that the lack of WAP applications contributed to the lackluster response from the Chinese market.

Still, Bidaud said China is "a huge market and it's going to attract a huge number of developers, so the applications side will be taken care of."

According to Bidaud, e-mail and messaging applications will be the predominant WAP services offered in China. "It's not the sexiest application, but it'll be the one to drive (mobile computing) until there is something more sophisticated," he said.

Bidaud added that Gartner Group research shows that trends in the Chinese population are similar to those in South Korea when it first started using wireless Internet services.

"If you look at what is popular in Korea with the early adopters of technology, we expect these to be very similar (in China)," Bidaud said. "In Korea, wireless stock trading and messaging have been very popular."

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