First Law of Technology bites again

First Law of Technology bites again

The First Law of Technology states that people always over-estimate the short-term impact of a new technology and under-estimate its long term effects. Latest case is Wi-Fi. Initially there was a feeding frenzy of analysts about its short-term potential of providing broadband access in eateries and cafes. But now it has dawned on people that there’s not that much money to be made providing that kind of service, so Wall Street has concluded that Wi-Fi is another dot-com-type bust.

Wrong, wrong, wrong. Wi-Fi is a seriously disruptive technology and we haven’t even begun to tap its potential yet. Interesting, then, to see that Intel seems to have understood it. Here’s a quote from John Markoff’s report from Sun Valley, where Intel’s top honchos, Craig Barrett and Andy Grove, provided an insightful analysis:

“Mr. Barrett now says that people who predict a Wi-Fi shakeout are missing the point, as well as failing to see the deeper implications of the technology.

“What is missing is the realization of how many legs this technology has,” he said.

In the three months since Intel introduced its wireless PC chips, the company has come to dominate the Wi-Fi market. It is now putting Wi-Fi circuitry in all of its chip sets for portable computers, investing widely in Wi-Fi industry start-ups and spending almost its entire annual marketing budget in a $300 million advertising campaign trumpeting the virtues of its unwired Centrino brand.

“Intel has raised the level of the water and is floating all the boats,” said Glenn Fleishman, editor of Wi-Fi Networking News, a Web-based daily newsletter.

Of even greater potential import, Intel plans to start a test in Texas in a few months that will use a combination of wireless technologies, including Wi-Fi, to bring broadband Internet connections directly to homes.

Last week the company quietly announced that it was teaming with a small equipment maker, Alvarion, of Tel Aviv, Israel, to back a free wireless standard, 802.16, that is intended to send data over distances of as much as 30 miles and at speeds of up to 70 megabits a second.

The data rate is high enough to comfortably stream high-definition television video broadcasts, and the range makes it possible to quickly deploy a system in a large urban or suburban area.

By comparison, current Wi-Fi technology is limited to several hundred feet and maximum speeds of 54 megabits a second. The Intel test, however, will explore using the 802.16 standard, known as WiMax, to distribute the data to Wi-Fi antennas in local neighborhoods.

If Intel is able to jump-start the market to reach millions of homes with a relatively inexpensive interactive data and video service, the technology could quickly alter the communications landscape.

That is already starting to happen. There is now an explosion of Wi-Fi hot spots in hotels, coffee shops, restaurants and airports, and a new wave of hand-held gadgets will soon supplement portable personal computers for a class of mobile workers that analysts are calling windshield warriors.

In a speech here on Thursday, Mr. Barrett sketched out a portrait of a market that it is growing rapidly.

There are now about 40 million Wi-Fi users, he said, and new access points are selling at the rate of about 15,000 a day, which makes Wi-Fi a much faster-growing technology than cellular telephony.”