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American Morning
What is Wi-Fi?
Aired July 16, 2003 - 05:16 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: Another product of the Internet age is the need for more connections in more places. That has led to the spread of wi-fi. What the heck is wi-fi? I know you're asking that.
As CNN's Fred Katayama explains, it just may change the way you surf the Net.
(BEGIN VIDEOTAPE)
FRED KATAYAMA, CNN CORRESPONDENT (voice-over): How about a hot spot with that hamburger, your hard cover or your latte? These so- called hot spots offer wireless connections to the Internet and they're popping up everywhere, from McDonald's to hotels to street corners, and wi-fi, which stands for wireless fidelity, is becoming more of a household term. But some tech analysts fret that investors are pumping too much money into an industry where demand is promising but still small.
RAJEEV CHAND, ANALYST, RUTBERG & COMPANY: There is a current bubble in wi-fi private equity investment. We've seen a total of $1.5 billion in just venture capital over the last three years enter a wi- fi market which is, in essence, $10 billion in revenue.
KATAYAMA: Chips ahoy, more than 60 startup chip makers have crammed into a fledgling $1 billion market. Some analysts predict many will go belly up. And the hot spot competition could melt some firms.
Research firm Gartner forecasts the number of spots worldwide will mushroom tenfold in three years, to more than 151,000.
KEN DULANEY, ANALYST, GARTNER: It's not so easy. There aren't, isn't enough traffic today to really make these hot spot operators profitable.
KATAYAMA: Users are willing to pay, but not much when coverage is so spotty and it's available free at many public places.
UNIDENTIFIED MALE: I don't use the coffee shops because you pay for it there.
KATAYAMA: The service at Starbucks runs six bucks for the first hour. At McDonald's, it's $5 for two hours. One survey says only three percent of consumers are willing to pay even $2 an hour. We found only two wi-fi users after visiting one McDonald's and three Starbucks in Manhattan. One drawback, only five percent of laptops today are equipped for wi-fi access. (on camera): But here's one bright spot. By the end of next year, nearly all portables sold will come wi-fi ready and Intel is running a multi-million dollar marketing campaign. But companies will have to super size coverage and downsize prices if wi-fi is to become as popular as a Big Mac.
Fred Katayama, CNN Financial News, New York.
(END VIDEOTAPE)
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Aired July 16, 2003 - 05:16 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: Another product of the Internet age is the need for more connections in more places. That has led to the spread of wi-fi. What the heck is wi-fi? I know you're asking that.
As CNN's Fred Katayama explains, it just may change the way you surf the Net.
(BEGIN VIDEOTAPE)
FRED KATAYAMA, CNN CORRESPONDENT (voice-over): How about a hot spot with that hamburger, your hard cover or your latte? These so- called hot spots offer wireless connections to the Internet and they're popping up everywhere, from McDonald's to hotels to street corners, and wi-fi, which stands for wireless fidelity, is becoming more of a household term. But some tech analysts fret that investors are pumping too much money into an industry where demand is promising but still small.
RAJEEV CHAND, ANALYST, RUTBERG & COMPANY: There is a current bubble in wi-fi private equity investment. We've seen a total of $1.5 billion in just venture capital over the last three years enter a wi- fi market which is, in essence, $10 billion in revenue.
KATAYAMA: Chips ahoy, more than 60 startup chip makers have crammed into a fledgling $1 billion market. Some analysts predict many will go belly up. And the hot spot competition could melt some firms.
Research firm Gartner forecasts the number of spots worldwide will mushroom tenfold in three years, to more than 151,000.
KEN DULANEY, ANALYST, GARTNER: It's not so easy. There aren't, isn't enough traffic today to really make these hot spot operators profitable.
KATAYAMA: Users are willing to pay, but not much when coverage is so spotty and it's available free at many public places.
UNIDENTIFIED MALE: I don't use the coffee shops because you pay for it there.
KATAYAMA: The service at Starbucks runs six bucks for the first hour. At McDonald's, it's $5 for two hours. One survey says only three percent of consumers are willing to pay even $2 an hour. We found only two wi-fi users after visiting one McDonald's and three Starbucks in Manhattan. One drawback, only five percent of laptops today are equipped for wi-fi access. (on camera): But here's one bright spot. By the end of next year, nearly all portables sold will come wi-fi ready and Intel is running a multi-million dollar marketing campaign. But companies will have to super size coverage and downsize prices if wi-fi is to become as popular as a Big Mac.
Fred Katayama, CNN Financial News, New York.
(END VIDEOTAPE)
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
