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Wireless Data Services Face Tough Sell

Lack of perceived value by consumers for 3G bandwidth indicates continued downward pressure on cellular data pricing, and will also dampen prospects for fee-based Wi-Fi service providers and aggregators, reports In-Stat. Nevertheless, because consumer enthusiasm for free Wi-Fi is ample, Wi-Fi hotspot operators do have an opportunity to exploit the technology�s low barriers to entry and its horizontal business model.

"Both cellular and Wi-Fi are currently serving mobile data users" says Allyn Hall, In-Stat analyst. "However, so far, neither service has found the sweet spot, the perfect balance of speed, coverage, and price."

In-Stat found the following:

- Amongst Wi-Fi users, more than 60 percent sometimes or always plan their travel with Wi-Fi availability as a consideration.
- 1Q04�1Q05 year-on-year Wi-Fi revenue and shipment growth was strong, but quarter-on-quarter growth figures show an overall slowdown.
- According to an In-Stat consumer survey, laptop/notebook computers are used for mobile data almost twice as often as cell phones.
- More than one-third of Wi-Fi users access ONLY free public Wi-Fi connections, and 18.9 percent use Wi-Fi ONLY at home or at work. Nearly two-thirds (61.7 percent), however, also said they use commercial hotspots.

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