Catch the Always-On Wireless Wave
National carriers are in various stages of rollout: Verizon has rolled out a 2.5G CDMA service, which offers speeds of up to 384 Kbps, on about 20 percent of its national network. Sprint plans to offer 3G services at peak speeds of 144 Kbps this year and more than 3 Mbps within two years. AT&T Wireless, Cingular and VoiceStream are also in various stages of rolling out GPRS-enabled networks with top speeds of about 155 Kbps. Analysts note, however, that "national" rollouts leave many geographic areas uncovered.
McMillan predicts that many of the new services,and the devices to access them,will flow through a traditional two-tiered distribution model. Sierra Wireless, for example, is reselling its wireless products through Ingram Micro "to make it look as much like a traditional model as possible," so VARs won't have to navigate the bureaucracy of a wireless carrier.
Carriers will rely on VARs to build applications to drive wireless usage, says Probe Research analyst David Chamberlain. But the carriers, some of which also sell services, "could be resistant to the channel having a piece of the pie," he says. That could mean bumpy relations, until carriers figure out who to compete with and when to cooperate with the channel, he cautions.
VARs will also need to learn new tools, McMillan says, such as data-compression, protocol optimization and security software geared for wireless networks. But the biggest challenge, says Gartner analyst Ken Dulaney, is writing applications for the lower bandwidth and intermittent availability of wireless networks. To test developers' wireless skills, "walk around the back of their machines every couple of hours and yank out their Ethernet cords," he says. "If their applications keep running, then they pass."
Just how much money might be involved, how carriers will price wireless services, and how the revenue will be shared hasn't been determined. Carriers could share part of a customer's monthly usage fees with a reseller. Another possible revenue stream for VARs, Chamberlain says, is carriers reselling or OEMing VARs' wireless applications.
While Dulaney is skeptical about short-term adoption, Sierra's McMillan says he is surprised at how much sell-through he's seen from distributors to VARs. "Apparently, there are some savvy VARs out there," he says. And they're just waiting for the first always-on networks to begin selling them to customers.
Web Bonus: Speech-Recognition Solutions