Race to Link Wi-Fi, Cellphones Picks Up Speed
By GINNY PARKER
Staff Reporter of THE WALL STREET JOURNAL
August 12, 2004; Page B4
TOKYO – Imagine walking to work while talking on your cellphone. Out on the street, you're using a cellular network and paying your mobile provider for each minute you gab. But once you reach the office, your cellphone detects a signal from your company's wireless Internet, or Wi-Fi, transmitter and automatically switches you from the cellular network to the Wi-Fi one. Your call is now being routed over the Internet, saving money on cellphone fees. You're also able to browse the Web on your cellphone at superfast broadband speeds.
Such technology -- under development in Japan and elsewhere -- stands to revolutionize telecommunications on two levels. For the consumer, the technology combines the convenience of cellular access with the low cost and high speeds of Wi-Fi, all in a single device. For the industry as a whole, this technology illustrates a new but increasingly common theme: how the convergence of once-discrete technologies -- in this case, mobile-phone service and the Internet – is pitting unlikely rivals against each other in a battle for chunks of a brand-new territory.
Japan serves as a prime example. Here, two companies have just announced handsets that function on cellular and wireless networks. One is made by NEC Corp. and will be marketed by NTT DoCoMo Inc., Japan's largest cellular provider. The other device is from Fujitsu Laboratories Ltd., a unit of computer-maker Fujitsu Ltd., which has long cooperated with DoCoMo by making handsets for the carriers' exclusive use. This time, however, Fujitsu, in a joint-project with telecommunications equipment-maker Net-2Com Corp., is striking out on its own.
Of course, Japanese companies aren't the only ones developing such devices. Other companies, including Motorola Inc., Schaumburg, Ill., and Hewlett-Packard Co., Palo Alto, Calif., have unveiled phones that combine cellular and Wi-Fi technology.
But the race to develop this new type of phone stands to be particularly heated in Japan, a country where cellular technology is more advanced than almost anywhere else. Nearly 70% of the population use cellphones, many of them packed with fancy features like TV tuners and video-conferencing capabilities.
Moreover, amid intense rivalry, cellphone operators are struggling to find new markets and ways to distinguish themselves. Devices like Fujitsu's and DoCoMo's -- designed specifically for corporate use -- are seen as the next big thing.
Both Fujitsu and DoCoMo's handsets are examples of a new breed of communication devices that merge PDA-like functions with cellphones. Nobutsugu Fujino, a senior researcher at Fujitsu, calls his company's product an "all-purpose remote control for the office." In addition to being able to make phone calls, the bar-shaped handset has a screen for Web browsing, e-mailing and looking at documents stored on a company's server.
Fujitsu's phone can function on wireless networks -- both office Wi-Fi systems and public, wireless, Internet-access points called hotspots. When the phone isn't within range of a Wi-Fi transmitter, a networking card inserted into the top of the phone allows it to function on cellular networks. The changeover from one network to another takes place without disruption of the service, using Fujitsu software called Seamlesslink, says Mr. Fujino. A price hasn't been set for the handset, which will be available this fall.
The handset runs on a Windows CE operating system from Microsoft Corp., and users can customize the device by loading it with different types of software. That's a stark contrast to the way cellphones typically work, locking users into the software provided by the carrier.
As demonstrated at a Fujitsu technology show last month, some of the proposed uses for the device seem almost futuristic.
For instance, the phone can be equipped with a card that can store personal identification data, with sensors installed around the office communicating with the device and determining the employees' location.
Calls that come in to the employees' work phone number are routed right to the employee, no matter where he or she is. And when an employee sits down at a workstation -- any workstation -- that person's personal computer desktop is automatically called up onto the computer monitor. In the conference room, users can use the phone to display documents on television screen for others to see.
As a potential competitor, NTT DoCoMo's N900iL, unveiled last month, is a phone that works over wireless office networks and DoCoMo's high-speed, third-generation, or 3G, cellular network.
Hitoshi Yasuda, who directs product development for corporate users at DoCoMo, calls The handset an "information terminal" that will work as a cellphone while also functioning like a PDA, allowing users to check office e-mail, schedules and documents saved on the company server. Each handset will cost around ¥40,000 (about $360) to ¥50,000 and will be available in the fall.
Mr. Yasuda says he isn't worried that the ability to make mobile calls over the Internet might eat into DoCoMo's core cellular services, since Japan doesn't yet have a proliferation of Wi-Fi hotspots. It's more important, he says, to bring new corporate users onto DoCoMo's networks.
