$14B opportunity awaits as enterprises adopt wireless data

More than half of the entire U.S. domestic workforce will be mobile by 2006, which will drive special opportunities for wireless device, application and operators, according to a study released by Access Markets International (AMI) Partners, a market intelligence consulting firm focused on global IT, Internet and Communications.

The AMI study projects the wireless data user base will nearly double every two years -- rising from 3.7 million in 2001 to more than 26.4 million in 2006. According to the study, the stars are aligned in several key areas:

- Wireless operators are aggressively deploying next-generation wireless network technologies.

- Enterprises are increasingly interested in cost-efficient wireless local area network (WLAN) solutions.

- Mobile applications have improved and access through Java Micro Edition (J2ME) and BREW encourage further growth.

- Operators have a better understanding of which mission-critical applications have the most applicability in a wireless environment.

- Handset manufacturers have developed and are delivering intelligent data-focused wireless devices.

By capturing 48.7 million subscribers by 2006, as the study predicts, device makers, application developers and operators are looking at a $14.2 billion revenue opportunity.

Wireless data adoption has been stymied by unclear value propositions and uncertainties surrounding devices, services and applications, said Scott Drobner, senior analyst and principal architect of the study.

Small and medium businesses, with fewer than 500 employees are expected to lead the market, rising from 2.5 million users in 2001 to nearly 16.3 million in 2006. This nets a compound annual growth rate (CAGR) of 44%. The study suggests that small businesses will move quickly because they have less bureaucracy, the solutions can be shaped to fit their needs end to end and they recognize the competitive advantage in having mobile access.

For their part, large enterprises (firms with more than 500 employees) will comprise 38% of the business user market in 2006, according to the study. The large base of both mobile and remote employees, branch offices and the reliance on remote Intranet access capabilities will fueled this category.

Cracking the wireless data egg is encouraging. However, there are still barriers that will get in the way of rapid adoption. Security concerns and centralized deployment procedures lead the list and likely will trip up operators for the short term. Also, the lack of a pricing consistency and rationale among the carriers will lead to confusion.