Wireless Penetration Rates Will Top 100 Percent

In the U.S., it will be an uphill battle until the 'killer app' is developed

Within the next decade, the majority of Americans are going to have not only their pockets and purses stuffed with wireless devices, but also their offices, homes and cars. Thats agreed. Whats up for debate is exactly how high wireless penetration rates will go and what will drive them.

Forrester Research estimates that 68 percent of U.S. households will have at least one cell phone by 2006. However, the remaining households are not at all likely to subscribe to any type of wireless phone service.

Forrester studies show that the percentage of the U.S. population with a wireless device of any kind will jump from 37.5 percent last year to 61.5 percent in 2005, led by Internet-capable devices, wireless phones, Web-enabled cell phones and personal digital assistants, in that order. Associated revenue will jump from $52.4 billion in 2000 to $101.2 billion in 2005.

But Massachusetts wireless research firm Ovum predicts that adoption rates will soar higher, faster. At the beginning of 2001, about 38.4 percent of Americans had wireless connections of some sort; Ovum expects that number to reach 101 percent in 2007.

Ovum Senior Analyst Robin Hearn said that though cell phone penetration rates are lower in the U.S. than in Europe, Americans are likely to spend more for service. Europeans, he said, favor prepaid plans.

In the business world, wireless adoption is not happening as quickly as one might expect. When Wirthlin Worldwide surveyed 85 Fortune 1000 companies, the majority of them said that fewer than 25 percent of their employees use wireless devices. Although the surveyed companies said they plan to increase wireless purchases by 2002, the researchers said penetration rates will remain at less than 25 percent.

Allan Carter, director of mobile marketing of Captaris, said wireless devices already deliver what businesses are looking for: an extension of the desktop computer. But for consumers, wireless is "an entertainment item, not key to their existence," he said. For consumers to really embrace wireless devices, theyll need to be presented with the elusive "killer app," and easy access and cheap services, Carter said.

"In the U.S., we want everything," said Carter, who estimated that he spends two weeks per month traveling outside the U.S. "We want it to be flashy, and we want it to be free."