Wireless embarks down IP road

Nokia's recent acquisition of Vienna Systems is another signal that the wireless world is banking on a usage shift from voice to IP-based data.

"We believe that what started as wireless voice will more and more move to all sorts of communications needs," said Pekka Lundmark, vice president of wireless business communications for Nokia. Lundmark believes IP will be the ubiquitous protocol for delivering all services.

Along with its recent acquisition of Ipsilon, Nokia is piecing together a strong base of IP expertise. "They, like anybody else, haven't been unaware of the fact that IP is, in the overall telecommunications arena, looming as an important protocol," said Martyn Roetter, director of communications technology at Arthur D. Little.

Beyond an entry into IP, the Vienna acquisition "gives [Nokia] a deeper relationship with Newbridge," said Tim Luke, telecom analyst for Lehman Bros. Newbridge held a 30% interest in Vienna and intends to carry on a strong relationship with Nokia.

Nokia believes consumers will drive the market for data-enabled phones in the long term. "But there isa tremendous market for making business communications wireless because the bandwidth limitations in the radio that have been the limiting factor in doing mission-critical applications are about to be removed," Lundmark said.

Other wireless powerhouses have been beefing up their IP capabilities through acquisitions as well. Ericsson in November completed the acquisition of ACC, a remote access and internetworking product vendor. Lucent Technologies may be traveling down the same path with the recent announcement of its intent to buy WaveAccess, which will allow it to build IP-based low-tier wireless data systems. And Nortel acquired Bay Networks primarily for IP technology.