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The Wi-Fi Revolution- The Next Major Bubble

What the heck is Wi-Fi? It's in the news everyday, and is undoubtedly the next major bubble in the stock market. I intend to get on this bubble with money making ideas long before it bursts.

Wi-Fi networker iPass (NASDAQ: IPAS) came public last week. The deal was priced at $14, but was originally expected to be priced between $11 and $13. IPAS closed at $18.67 on its opening day. Does this bring back fond memories of the late 90's for anyone else?

Wi-Fi is an acronym for "Wireless Fidelity". Fidelity alludes to a real or true solution. Wi-Fi is the technology which allows us to have a broad band wireless connection to the Internet or any broadband network. The Wi Fi revolution is multi faceted, very fragmented, and is here now. Stocks of companies moving into Wi-Fi market are going crazy.

DSL Net was a casualty of the dot com bubble. Recently the company obtained an additional $30 million in financing, and established a "Hot Zone" (wireless broadband internet access) in the harbor at Newport, Rhode Island. Since making the announcement, DSL net has avoided losing its NASDAQ listing and exploded off the screen, up 220% off the $.38 level it had traded for months. The stock, which had been trading about 250,000 shares daily, hit 16 million shares one day and now trades millions of shares everyday.

Several other stock symbols to look at include PCTI and WAVC.

Where Do You Find Wi-Fi?

The concept of Wi-Fi is highly fragmented. It reminds me of the early days of cellular. As we all become increasingly dependent on the Internet, we need to become more mobile in its use. Here are several examples of Wi-Fi implementations:

By early next year 100 Boeing jet aircraft are expected to morph into flying cyber cafés. For a $25 fee, passengers will be able to enjoy high speed wireless internet access during their flight. Boeing intends to retrofit 4,000 jets by the end of the decade.

"Hot Spots" are popping up at locations nationwide. T-Mobile has already installed "Hot-Spots" at thousands of Starbucks locations nationwide. Verizon is charging into the fray by converting payphones in busy metro areas into "Hot-Spots".

Pronto is probably the biggest name in the Wi-Fi game today. Boingo, which provides Hot-Spots in Hilton Hotels and several of the larger airports around the country is not far behind.

However, Wi-Fi is not limited to busy metro areas. Because of the low infrastructure costs, Wi-Fi is ideal for rural environments. Small Wi-Fi ISPs, known as WISPS (Wireless Internet Service Providers) are popping up all over the mid west.

It is estimated that 80% of people in rural areas are now using the internet. Only about 22% have access to broadband, as neither cable or dsl has come to their homes. Rural wireless operator Midwest Wireless, a Minnesota based regional cellular carrier, has been installing Alvarion fixed wireless equipment for the past 18 months. The system now has 60 sites and about 1,500 broadband subscribers.

Big Boys Jump Into the Fray

Big boys with big bucks have been gearing up for the Wi-Fi revolution for several years. Examples include:

* Intel is spending $300 million to market its Centrino computer chips, which come equipped for Wi-Fi.
* Cisco Systems agreed to spend $500 million for Linksys, a Wi-Fi equipment maker. That will put Cisco into head-to-head competition with
* Microsoft Corp. Microsoft is pushing XP, the new version of Windows with Wi-Fi features built in.
* Cometa Networks, the new joint venture made up of Intel, IBM, and AT&T, is building a nationwide network of 20,000 hot spots over the next three years.
* Verizon is building hot spots all over the country, converting phone booths into hot spots.
* T-Mobile USA, already anchored in Starbucks, is following suit.

Is it any wonder the titans of technology are jumping into the Wi-Fi revolution? The bar graph I have provided shows estimates for the growth of wireless demand through 2004. Wireless users are expected to grow worldwide from 80 million in 2003 to 150 million in 2004. The North American market is the laggard, and just beginning to gather steam. Wireless use is far ahead of us in Europe.

The Good News

For the latest on the Wi-Fi revolution, the best resource on the Internet is http://www.80211-planet.com/.

I have identified a totally undiscovered Wi-Fi idea which no one knows about, and I mean no one. I'm not sure about the timing of the first release, but I hope to kick off the idea in next weekend's edition. This is a true ground floor opportunity in the hottest segment of the market. Right now, I have to run out to my local Fry's and check out the latest Sony Notebook computers equipped with the Centrino chip. I want Wi-Fi too. In the meantime, we you aware that: