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ABI Research Says WiFi Cell Phones Are Key

Today, we see only a few handsets that support Wi-Fi. Barriers exist, but when they are overcome, both mobile operators and consumers will reap the rewards.

The high cost of the chipset is one inhibitor. But according to ABI Research, that cost will drop to around US$6.00 by the end of 2004.

Designers face challenges when building these chipsets into cellular phones, both in the shrinking physical form factor of the handset, and in light of signal interference.

Phil Solis, an ABI Research senior analyst, adds another difficulty: VoWi-Fi uses more power. But Wi-Fi IC vendors such as Texas Instruments are successfully working to decrease power consumption.

Some mobile operators have no clear strategies for extending their data networks using Wi-Fi hotspots, nor do they see a clear incentive to support Voice-over-Wi-Fi, because having Wi-Fi in a handset for data could also hurt subscriptions to cellular data services.

Says Solis, “Cellular providers will bundle multiple wireless services to provide the customer with access, no matter what the technology is. In ABI Research’s opinion, Wi-Fi and cellular data service are complimentary.”

T-Mobile is probably the most active in promoting Wi-Fi services, but at least a couple of dozen others have either taken the plunge, or are planning to do so.

Operators that bundle Wi-Fi with cellular services will win over consumers. By offering value-added services, operators can use Wi-Fi in the cellular handset to retain customers and keep ARPUs level, instead of seeing them drop.

These and other topics are discussed in ABI Research’s report, “Handset Integrated Circuits Quarterly Service.”