Monday, September 12, 2005

EBay to Pay at Least $2.6B for Skype - WHY???

I am sure you all read the headlines and articles about EBay buying Skype.

I have attached two below.

Though the immediate reaction is that eBay is looking to voice enable their auctions, letting a bidder talk to the seller, brining into light the ability for the transaction to be taken 'out' of the eBay environment. I actually think there is probably more to this. eBay are much smarter than this and to add voice to their service they could have bought or developed in house for a lot less.

If we follow a few of their past take-overs or investments we will find that they buy a product or service which will enhance their existing offering/process and expand their user access.

Buying was obviously to reduce their processing costs as most purchases were already using the paypal service, but, also to gain access to the paypal community.

When they bought, a deal recently completed they were buying a great catalog technology to clean up their mess, but, also to gain access to the user community and its global reach.

It must be the same here, obviously voice enabling their auctions might bring another type of experience which will attract bidders and sellers looking for the live touch. This can be a great way for them to invigorate their liveauctions business. However how about tapping into the Skype market. How about employing similar technology are employing in their google mail offering? Scan the voip calls and pop up adds and offerings based on keywords in the conversation? How about a shop now button on Skype directly into ebay? How about an eBay driven Skype notification for end of auctions? Maybe it is all of these together that are worth the billions.....

what are your thoughts?

eBay to Pay at Least $2.6B for SkypeMonday
September 12, 10:04 am ET
By Mattias Karen, Associated Press Writer
EBay to Pay at Least $2.6B for Skype Technologies, Total Value of Deal May Climb to $4.1B

STOCKHOLM, Sweden (AP) -- Online auctioneer eBay Inc. agreed Monday to pay at least $2.6 billion for Internet-telephony company Skype Technologies SA, a deal that confounds many analysts not just for the lofty price tag but also for what some consider the companies' dubious compatibility.
The total value of the deal may climb to $4.1 billion based on whether Skype meets a series of performance targets over the next three years, San Jose, Calif.-based eBay said. It said the acquisition would create "an unparalleled e-commerce and communications engine" for Internet users worldwide.
Low-cost Internet phone providers like Skype are creating upheaval in the telecommunications industry. That's because Voice over Internet Protocol technology, or VoIP, breaks calls into data packets that get routed over the Internet, which is much more efficient and cheaper than the traditional circuit-switched phone system.
Skype -- founded by the creators of Kazaa, the free music-sharing program that riled the music business -- gives away software lets people talk for free over the Internet using computers and microphones. A paid version, SkypeOut, allows those calls to be connected to regular phones.
Some analysts have been skeptical about eBay's needs for a VoIP provider.
EBay buyers and sellers can communicate with each other via e-mail before a transaction is complete, and presumably Skype would give eBay a way to add voice to such chats. But eBay traditionally has been guarded about such communications out of fears that deals might get taken offline to avoid fees.
EBay said Skype would "strengthen eBay's global marketplace and payments platform, while opening several new lines of business."
"Communications is at the heart of e-commerce and community," said eBay's chief executive, Meg Whitman, who had won praise for avoiding deals beyond eBay's core, marketplace-based strategy, especially during the late 1990s Internet craze. "We will create an extraordinarily powerful environment for business on the Net."
EBay shares dipped 73 cents, or 1.9 percent, to $37.89 in morning trading on the Nasdaq Stock Market.
Niklas Zennstrom, Skype's CEO and co-founder, will retain his position and will join eBay's senior executive team. He said the deal will help advance his company's goal to "revolutionize the ease with which people can communicate through the Internet."
But Ovum analyst Mark Main said he considered the deal "far-fetched" and said eBay could have found cheaper ways to improve its Internet communication abilities.
"EBay could have developed its own sophisticated messaging and communications platform, or even bought one, for far less money than it is paying for Skype," Main said. "And if eBay is mainly paying for Skype's user base and brand, that makes this a risky investment."
Skype has 53 million registered users and the company says more than 2 million people use Skype at any given moment. Since it was introduced in 2003, the company's free software has been downloaded more than 164 million times.
In 2004, the company generated about $7 million in revenues, which it projects will snowball to $60 million this year and more than $200 million in 2006.
EBay recently trounced analysts' expectations by reporting it earned $291.6 million, or 21 cents per share, for the three months ended in June, a 53 percent increase from last year. Revenue totaled $1.09 billion, a 40 percent increase from last year's $773.4 million.
Overall, eBay's community spanned 157 million registered users, up 10 million from March. Its online payment service, PayPal, also is becoming more pervasive, with 78.9 million account holders who exchanged $6.5 billion during the quarter.
But bringing Skype into the fold is expected to cut eBay's earnings, at least in the short term. EBay projected that the acquisition will bring down earnings per share by 4 cents in the fourth quarter of this year and by 12 cents in 2006.,15704,1103966,00.html

FAST FORWARD Why Skype? EBay's Still Thinking BigWhether or not the online auctioneer overbid for VoIP company Skype, the deal does make sense.Sep 12 2005By David KirkpatrickFortune.comLast week's rumor became this week's reality when eBay announced Monday that it would buy Internet phone company Skype for between $2.6 and $4.1 billion, depending on Skype's financial performance over the next two years. A lot of us in the tech community—even senior executives at major tech companies I've spoken with—are still scratching our heads. If all eBay wanted to do was to add voice capabilities to its online transaction platform, there would have been better ways to do it than to spend several billion dollars for another company. Yet if you think of eBay as a collector of communities, several rationales for the marriage start to come into focus.First, there are more similarities between the two companies than many have noted in the initial coverage. Both are essentially hubs which enable their member/customers to initiate and complete transactions on their own over the Internet, without much intervention by the company. Ebay facilitates merchandise sales; Skype facilitates voice calls. Keep in mind that one of the biggest changes now happening in business is the empowerment of the individual. It's all about power being dispersed by the intrinsic equalizing force of the Net. You might say that eBay seems intent on creating the first genuine conglomerate of what I have called the Contribution Economy.Indeed, Pierre Omidyar—eBay's founder, chairman, and largest shareholder—is one of the world's most passionate apostles of the notion that the way the Internet puts power and control into the hands of individuals is a fundamental, society-altering force. Here's something he recently wrote on his blog: "EBay has helped people pursue their individual passions and discover their own power to make good things happen…they've become empowered by participating in an open and honest marketplace, in a level playing field, meeting and working/trading with people who share their interests." This is what most excites him about the company he created, and I'm convinced this kind of thinking still plays a big role in its internal deliberations. Similar things can be said about Skype. The company did not invent Voice over the Internet. But it has created the largest community of users for such a service. Just as with eBay, every incremental user makes Skype more valuable for everyone, because there are more partners available to transact—or communicate—with.But as the company has said, its ability to sell the for-pay version of Skype (which connects an Internet call to regular telephone lines) to the 157 million registered users of eBay, will reinforce the viral growth of all these businesses, as will parallel efforts to market the services of eBay (and especially its payment subsidiary PayPal) to the 52 million registered users of Skype.While eBay emphasized in its announcement that it believes Skype is a strong stand-alone business, the online auctioneer might gain so much growth for its own user community that the purchase ends up making sense for eBay, regardless of Skype's own revenues. Perhaps Skype will be free for eBay users, which might also drive people into eBay. And the ability to talk easily and semi-spontaneously to a seller could make the experience of shopping on eBay even more comparable to offline purchasing, which could attract more buyers.Then there's growth. EBay's growth in members and revenues has slowed recently. But eBay is overwhelmingly an American business while only one-eighth of Skype's users are in North America. Both companies thus get a quick way to broaden their user base.Still, this deal is best compared to eBay's much-smaller purchase last year of a 25% stake in Craigslist is an online local classified service that is growing wildly; it's also, like most of Skype's services, absolutely free. But by affiliating with both services, eBay keeps attractive online communities out of the hands of its competitors, notably Yahoo and Google, and gains access to a growing group of active Internet users whose business value it can, if necessary, figure out later. If eBay wants to be the first real conglomerate of the Contribution Economy, it will need as much of that economy's true currency—empowered users—as it can get.So we might expect to see more acquisitions by eBay of companies that meet a basic philosophical criterion: They give individuals great power they never could have had before the Internet came along. Those businesses don't have to be directly connected to eBay's online marketplace; I'm suggesting that eBay may see itself as not just an online intermediary between buyers and sellers but a nexus of personal Internet empowerment.I'm not sure that the huge price eBay is paying in the Skype deal is justified, but I think I do see why the company was willing to pay it. With Google and Yahoo growing exponentially and beginning to tower over the Internet scene, eBay is under pressure to keep up. Its basic vision—better living though online communities—is the same as Skype's; that's a key factor to consider when evaluating this deal. It may be just the latest of many more to come.

Tuesday, August 02, 2005

Can you steal something with no Value and not Tangible

Many articles like the ones below have called a person using someone else's WiFi a thief!!! Some as you can see below even concluded that it is like stealing apples from a store.


Lets for a second not get into the issues of whether or not this person actually went into the local network, lets focus on him simply using the other persons WiFi connection.

What is he stealing???? NOTHING!!! Especially in the USA where the majority of people who have WiFi at their home have broadband and the majority of these broadband customers do not have a limit on how much KB they can download, which means surfing on someone else WiFi is really stealing nothing. ( It would even be hard to prove that having the two of them on the same network slows the response time of the owner, which if proven would maybe fit into stealing the owners time [milliseconds] as he waits for response.)

I am not sure of a good analogy but how is it different from breathing the air from your neighbors backyard?

Your comments are welcome.

Floridian Faces Wireless Trespassing Charges
By Jay Lyman
Part of the ECT News Network
07/08/05 11:45 AM PT
"This is very similar to you walking down the street where a store has apples and oranges, and you grab one and keep going," said Ovum Vice President of Wireless Telecoms Roger Entner "Just because it's happening, and I think it's happening frequently, doesn't make it right."

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A Florida man faces stiff penalties for allegedly accessing someone's residential WiFi Internet connection while parked outside the supposed victim's home in April.
Police in St. Petersburg reportedly said 41-year-old Benjamin Smith would be charged with unlawfully accessing a computer network, a crime carrying a penalty of as many as five years in prison. However, Smith could also be sentenced to probation, depending on his intent and activity while allegedly accessing a fellow Floridian's wireless network, officials said.
While some have described the case, which is set to begin with a pretrial hearing Monday, as an overkill reaction to an increasingly common activity, the supposed victim in the case expressed legitimate concern that his data was at risk and his connection might be used for illegal or illicit purposes.

Home Insecurity
Wireless experts said the case highlighted how insecure most home wireless networks are, as well as the significance of potential data loss, identity theft or getting your computer hijacked for malicious activity that can carry liability.
Ovum Vice President of Wireless Telecoms Roger Entner called the Florida case and others involving unauthorized wireless access of private hotspots "common theft."
"This is very similar to you walking down the street where a store has apples and oranges, and you grab one and keep going," Entner told TechNewsWorld.
The analyst indicated there appears to to be more and more unauthorized wireless access and charges against those who do it. Even if the Internet activity is simple browsing or e-mail, Entner said that it is still theft of bandwidth, which makes the price of bandwidth for everyone else go up.
"Just because it's happening, and I think it's happening frequently, doesn't make it right," he concluded.
Wireless Impersonators
Because a large number technology users do not secure their wireless hotspots, Entner added, they open themselves up to liability for the illegal actions of others.
"The other danger is that you can mimic, you can assume the digital identity of the person who owns the hotspot, and you can engage in a range of things, such as slandering or downloading child pornography. In the end, it's the person who has the hotspot who will get nailed for it," Entner said.
Entner advised wireless users to simply turn on whatever security their WiFi products provide. Doing so, he said, shows at least some effort to secure the network, thereby alleviating some of the users' liability. Anything is better than nothing, he indicated.
"Take the strongest encryption and go with it," the analyst said.
Victims or Vehicles for Theft?
Gartner vice president of mobile computing Ken Dulaney told TechNewsWorld there were differing opinions on the Florida and other wireless trespassing cases. One side argues that the issue is equivalent to burglary of an unlocked home, which is still theft; the other argument argues that wireless users are inviting the offense with a lack of security.
"I tend to think it's not an invasion of your home," Dulaney said. "You're sending something outside your house. If you don't secure it, shame on you."
Dulaney said the Florida case for Smith is "right up there with the McDonald's (NYSE: MCD) hot coffee suit."
The analyst added that he did not think such cases, even if they increase in number and prominence, will impact the wireless industry, indicating that vendors have done all they can so far. While securing hotspots is still a bit difficult, he said, it has become much easier in the past two years.


Wireless World: WiFi 'Vampires' Attack
by Gene J. Koprowski
Chicago (UPI) July 15, 2005
If a squatter moved in next door, and ran electrical extension cords from his living room to an outlet on your patio, you might object to his obvious pirating of your electricity - because his actions would be obvious.
Many computer criminals around the country likewise may be stealing, but in this case the commodity is broadband WiFi access. Because the thefts occur over invisible wireless networks, however, most victims do not know about it, experts told UPI's Wireless World.
"Having your WiFi signal stolen is a real risk today," said Janet Kumpu, president and chief executive officer of Fortress Technologies in Tampa, Fla., a networking software developer. "It's not just hackers who want to break into an e-mail account. They want to use your network for their own broadband connection."
A suspect was arrested recently in Florida allegedly for doing just that. Police arrested Benjamin Smith III, age 41, reportedly for accessing a computer network without authorization - a third-degree felony.
According to the police in St. Petersburg, Fla., the suspect was sitting in his SUV using a laptop computer outside the home of Richard Dinon.
This kind of thing, cyber-squatting, is more common than a casual observer may suspect, experts said.
"Years ago, before I had a clue how WiFi worked, and when I lived in a condo, my bandwidth was always dog slow," said Robert Siciliano, an ID theft expert and security consultant in Boston.
"Then my computer geek friend came over and discovered that my neighbor was running a peer-to-peer program - Kazaa - next door off of my wireless connection."
Sometimes, the piracy may be unintentional.
"Recently, I rented a vacation condo that included WiFi access," said Ted Demopoulos, an IT consultant and professional speaker in Durham, N.H. "There were two equally strong and wide open signals. Which one was I supposed to use?"
WiFi networks are generally set up in one of three ways, experts said. Sometimes, they may be visible and open - and require no password to access. They also may be visible and password protected, or may be hidden and password protected.
What makes things even more complicated is although most open networks are public, more and more suburbanites and urbanites are installing WiFi access in their homes, and paying a subscription fee for it. Because most people are not very literate technically, they may not know how to set up encryption or other security features.
"The hackers go there," said Wayne Burkan, vice president of marketing at Interlink Networks in Ann Arbor, Mich., a WiFi security company. "They know that the networks of companies are protected, but those of homeowners are not."
There are Internet sites for hackers such as, which aggregate data for the computer criminals and let them know what networks in what neighborhoods may be vulnerable, Burkan said. "My guess is that 50-70 percent of networks are not protected."
Burkan said that the risks of hacking into a WiFi network are greater for consumers than those posed by hacking into a landline network. That is because the passwords and user names are transmitted wirelessly for particular accounts and therefore can be grabbed.
When someone acquires that information, "they can log into any Internet account as if they are you," Burkan said. "These people are information vampires - ready to suck the life out of you."
Some experts doubt whether criminal prosecution of any WiFi offenders will succeed, however.
Attorney Evan Barr, formerly the chief of the major crimes unit at the U.S. Attorney's office for the Southern District of New York, and now a lawyer with Steptoe & Johnson, said the courts long have held it is not illegal to intercept calls placed by users of cordless and mobile phones.
"That's because people who use these devices do not have any reasonable expectation of privacy under the Fourth Amendment," Barr said. "WiFi basically operates on the same principle as these devices, so it seems unlikely that a prosecution for stealing a WiFi signal could withstand judicial scrutiny."
Gene Koprowski is a 2005 Lilly Endowment Award Winner for his columns for United Press International. He covers networking and telecommunications for UPI Science News.
Related Links

Sunday, June 05, 2005

Why did eBay but

One Wednesday Jun 1, we all heard that eBay decided to acquire shopping. com for $620million.
Why did eBay decide to buy a price comparison engine?

My thoughts were that eBay is probably looking to integrate the price comparison engine into their database. When a person would search for a product it would at the same time searh the entire eBay database of auctions and since most auctions while they are taking place have rather low prices, eBay auctions will likely be the top of the list on the price comparison.

My father thought that eBay would integrate the engine for exactly the opposite reason; to inform eBay users what the market price and availablity of a product they are bidding on at eBay is.
What do you think?,EBAY&d=s

Thursday, April 07, 2005

Amazon, Watch them and Buy Them

Here is an interesting site

They put a plugging on your PC and track your music habits. This is rather amazing. As soon as they have critical mass they should be integrated directly into will be able to predict best sellers and losers, manage shopping trends and best of all will be able to make intelligent recommendations for music purchases.

If Apple are serious about their iTunes business (which they seem to be as iTunes is now the number 1 seller of digital music) they should probably rush to buy this before Think about it a box could popup in your iTunes player as you are listening telling you what else you would enjoy....

I am rather surprised this is isn't built in to iTunes, after all iTunes does create a statistic on your PC and is connected to the Net for the Store function and for software upgrade.......

Wednesday, April 06, 2005

VoIP2Go (part 2)

On my last visit to New York, I enjoyed the FREE WiFi service many Parks in NY have.

Bryant park a square block spanning 42nd Street between 5th and 6th avenue has a superb connection. One can literally sit on the steps of the New York Public library and do all your work. Working the corner of 42nd street can take a new meaning. If I just had a battery operated DTA and battery operated WiFi Access Point (someone should come out with these), I can sit and call the world and be fully accessible, using my Packet8, Vonage or other VoIP service.

Then again I had my Laptop so I could call using any one of the soft-phones out there, I could actually run a few with different bases to maximize costs savings. I could use BT Communicator ( for calls to or from the UK and I could use SkypeOut ( or Net2Phone ( for the US. The best being from Jeff Pulver (He is amazing!), using his FWD service ( and his extensive peering numbers I can call any of my friends globally that already have VoIP based phones and they can call me with out paying a penny (other than Skype which are still not running a globally accepted SIP protocol, more in a different blog devoted to the future of Skype).

Which brings me to another thought, why don’t Packet8, Vonage and the others come out with a soft-phone line BT that I could use when I am away from my home, where their DTA is installed? Would be a great feature.

A few weeks passed since I was being overly productive on the corner of 42nd & 5th when I got an email recently from my friend Bini. I was supposed to call him but he was catching a flight from New York to Frankfurt and by the time I remembered he was in the air. The email asked if I was still up and if I was I should please call him on a New York number. The email was post-what-I-remembered as his take-off time, so I figured he got delayed, the area code was 718 which is the same area code of JFK.

I called…… The connection was not bad at all, and we proceeded to have a 35-minute conversation. Bini was in the Air on Lufthansa using his laptop logged in to the Lufthansa Internet Broadband service FlyNet (!ut/p/_s.7_0_A/7_0_4VGH?cID=6_0_UGE&nID=7_0_4VGI&l=en&nodeid=1331277#availability) and using the new SkypeIn ( service.

The Future is Here!!!!

You can imaging even the sky is no longer the limit to the offerings….. AiPhone for example should get their act together quickly!!! They should offer unlimited calls in the air for one fixed low cost for example. Watch you last IP-TV-DVR/PVR saved episode anywhere in the world, etc.

VoIP2Go (part 1 here )

Sunday, March 20, 2005

Around the world in Numa Numa days

My Friend Jay from NY sent me this picture ( he took on March 1st on his way to the Siyum Hashas ceremony. Over the past two weeks, I managed to receive it from several people, with a different name, and a different comment or subject topic attached to it, but, in general the same exact picture.

The speed at which this unassuming picture made it through the world and through different cultures is amazing. Though we are all aware of the power of e-distribution experiencing it first hand it shocking, especially since I would mostly expect to see this happening with news worthy items or something totally out of the ordinary, like the famous Numa Numa Dance.

Thursday, March 17, 2005

2GRID or not 2GRID

Yesterday in one of the sessions in the Dealing With Technology Risk Waters Day (, an open discussion about GRID's started.

Here are a few important observations.

Scott Marcar JPChase has for the trading floor a GRID of 2500-3000 CPU's, he found that trying to use idle PC's didn’t work, he created a special back bone just for his GRID off of which he has IBM Blades and Genera boxes. He has managed to reach an internal running cost of a bit below $1 per CPU Hour, he is not charging his respective departments yet and feels he could get it to below 50 cents. Applications/Businesses utilizing his GRIDs are Market Risk, Risk, FX, and FX Options.

Marc Baumslag from Merrill first emphasized not to confuse GRID Computing with Parallel Computing. They tested and built a few GRIDs’ for their Risk and Credit Risk and found that they are simply not worth it. In general he feels GRID technology is an efficiency measure one should somehow harness as probably most PC's have at least a 50% CPU idle time and that is simply a waste. So in concept GRID should create an efficiency and thus save money. This is why he is still testing, though with no real positive finding. He did point out that a GRID would only work if you have an application or a process, which you can easily, split and distribute. For complex risk calculations etc. one must go with parallel computing, which he indeed does successfully.

Joseph Panfil CME, will not touch a GRID!. Needs reliability and speed, hates slowness and latency. His electronic trading is heavily dependant on Parallel Computing.

The more I meet and hear from people who actually put time and money and applications into making GRID work the more I feel the following;

The investment in getting a GRID to work, and to generate an efficiency and maybe even a cost save is enormous. Thus it is probably only worth it if you have an enormous amount to save.

In order for a GRID to work, don’t fool yourself, you will need to create a NEW network, probably an Infinband band, and you will probably need to rewrite some of your apps and not all your apps or businesses will be able to benefit.

PC's with idle CPU's are not necessarily a gold mine and maybe if you really need to utilize a GRID, The Sun $1 per CPU hour is not such a bad proposition after all.

Wednesday, March 02, 2005

Happy Birthday Yahoo - 10 Already Wow!

Which Web poerhouse was started by two Stanford geeks as a simple search pag with a silly name and became the biggest thing on the Internet?
Nope, not them. Try again. Yahoo!!
(from this months wired.)

Yahoo turns 10 today, get your free ice cream here ( or 10 year history recap here (

Yahoo!'s numbers: 165 million registered users, 345 million unique visitors a month, $49 billion market cap, and a 62 per­cent increase in revenue last quarter, bringing 2004 total revenue to $3.6 billion. Yahoo! makes more money and has more patents, services, and users than Google (

Tuesday, January 25, 2005

who needs UMTS

After spending an afternoon sitting in the Jerusalem City Center, surfing the net via a FREE municipally provided WiFi internet connection. I have come to the conclusiong that WiFi ( or later WiMX or whatever if goes to ) become the wireless standard beyond its original real plan. Why wouldn't cell phone move away from cellular, GSM, CDMA etc and into WiFi? Why don't they simply halt at least the data expansion of UMTS, put WiFi into the phones, provide a very fast internet data connection to the phone with a later plan to transition fully into WiFi and then even the called end up being VoIP calls? Looks like some of this is actually happening....... stay tuned......

A great articla from Wireless Week

Terrible Twos?
Dual cellular/Wi-Fi schemes face dual handoff, powering issues.
By Karen BrownJanuary 1, 2005Wireless Week© 2005, Reed Business Information, a division of Reed Elsevier Inc. All Rights Reserved.
The classic B-52's song declared "Roam if you want to," and that is the ultimate goal behind developing technology that melds cellular and Wi-Fi local area network connections on one handset.
But it looks like getting there will be a fairly long trip, filled with complex technical and strategic decisions governing when and if a call should be switched from one network to the other, and how to handle the increased power output needed to keep the Wi-Fi antenna active. Still, there are some early indications as to which direction the technology is taking.
Early on, many products are using an "either-or" strategy for their dual cellular/Wi-Fi connections. That is the case for NTT DoCoMo, which rolled out the NEC N900iL handset in November. While it sports radios that can tap DoCoMO's FOMA GSM and an enterprise WLAN, Wi-Fi LAN, it can't roam between the two.
"There is no handover," notes Susumu Takeuchi, DoCoMo's vice president of corporate communications in the United States. "If your call is on the FOMA, you cannot hand off to the LAN network. That isn't possible."
Similarly, Nokia's 9500 Communicator offers a data-only Wi-Fi element, and it also does not possess the ability to shift a data stream from one network to another while the transmission is in progress, according to Dan McDonald, director of marketing for Nokia's enterprise solutions. Instead, the handset has the ability to switch radios and retransmit the data if the handset strays out of Wi-Fi network range.
That may not create a huge problem for users who want to send an e-mail, but with plans to add IP voice capability to future dual-mode, such handoff capability will be important, McDonald notes. "It will be a burden for people who want to continue that conference call in the car on the way home, dropping calls and re-establishing. That will limit adoption. This has to be solved."
Even if roaming is possible, though, it may not always be preferable. In the case of a cellular call in progress, it may not make sense to automatically switch it to a Wi-Fi connection, McDonald points out.
"This switching of calls – it all sounds interesting and romantic, but it's kind of silly to go through all that trouble for a call that has already been established," he says. In addition, users may not want to switch networks if the Wi-Fi connection is in an unsecured public hot spot.
In contrast, it may be vital in the reverse scenario, where a person is talking on a Wi-Fi connection and walks out of the network area. In that case, the handset would have to either drop or have the ability to handoff to the cellular network.
"You can demonstrate that now in the lab environment, but again, the setup has to be so tuned and so consistent a recipe that it won't be generally available to people for a couple of years," McDonald says.
TRIO's SOLUTION The trio of Motorola, Avaya and Proxim, however, say they have cracked that problem. Combining Avaya base stations and network gateways, the Motorola CN 620 handset and Proxim silicon, the three have produced what may be the first IP system that can hand off voice and data signals between Wi-Fi and cellular networks.
The joint offering, dubbed the Seamless Communications Solution, will be marketed by Avaya and is now in field trials. The Seamless Communications Solution system can shift calls from one network to another, automatically setting up a second, parallel call if it detects the call signal is weakening.
"So as I walk away from the building and the signal gets weaker, the phone will decide when it should start to launch an independent call through the wireless PSTN, and when it decides [the signal] is weak enough, it will just hand over," says Frank LoVasco, Avaya's senior manager for mobility. "It's a make before break kind of technology."
One of the trickiest problems to solve with such roaming technology is choosing when to switch network connections – particularly if a user is walking down a street in a commercial area where there are several hot spot outlets. Motorola's answer is to limit the Wi-Fi connection to only the user's home campus. In that way, the phone doesn't face a decision of whether to tap into nearby hot spots as the user walks.
It also can distinguish between its own company access point and Seamless Communications Solution access points run by other companies.
"When we are in the GSM world, the phone is basically GSM only, so it is not necessarily looking for an antenna," explains Bob Duerr, director of product marketing for the Enterprise Seamless Mobility Group. It does periodically wake up to scan for antennas, "but what it is looking for is some very specific signaling from some very specific access points. So if it doesn't see those access points, it simply goes right back to sleep."
That strategy is finding favor among enterprise customers as an acceptable tradeoff between security and cost of cellular minutes. "We originally thought that the enterprises would want people to be able to come in from these hot spots to cut down on their cell minutes," Duerr notes. "And we're finding they don't because of the security issues of coming in from a public spot through a firewall."
POWERING ON Limiting the Wi-Fi connection also is a strategy in dealing with another vexing problem: battery drain. Wi-Fi was not originally developed as a mobile technology using battery-powered devices, so it needs some fancy engineering footwork to meet its power requirements on a mobile handset.
Motorola's CN 620 has the standard cellular battery and offers between 150 and 190 minutes of continuous talk time. Unlike some other early hybrid Wi-Fi handsets, the CN 620 includes proprietary technology that cuts down the power drain of an active antenna. If a handset is communicating with a Wi-Fi base station, for example, its GSM antenna is powered down.
"Unlike some phones where they are constantly looking for antennas and some of the dual-mode phones we suspect where you can't turn the antennas off … some of the proprietary technology we have inside there has really curtailed a lot of that," Duerr says. "The phone becomes very, very intelligent inside the network because it knows what it is talking to."
In the office, the handset can be placed in a standard cradle charger that also has a place for an extra battery. A USB cable can plug into a desktop PC and provide charging as well as actively synching with a computer's Microsoft Exchange or Outlook applications.
Other dual-mode Wi-Fi and cellular products use similar strategies.
TIME FOR TALK But talk time still is an issue for these devices. The NEC handset offers standby power dual mode of 150 hours, with continuous talk time on the FOMA network totaling 140 minutes and on the WLAN 160 minutes. That's short of the average 240 to 300 minutes now offered on many cell phones.
Nokia's McDonald acknowledges that putting a Wi-Fi radio into a mobile handset does come with a powering challenge. He says most Wi-Fi-enabled devices allow only three to four hours of use.
"Wi-Fi is something that does draw battery power more so than cellular," he says. But he adds with Nokia's work in power management, "there are all kinds of technological tricks that are played – in your transmission power you only use what you absolutely have to, et cetera. The Holy Grail here is to ultimately have a full day of power in your hand. It's eight hours of power in your hand that you will have to work with without recharging. That's the ultimate goal."
Device size limits will curb the size of the battery, but McDonald notes an operating system such as Nokia-backed Symbian that has been designed for wireless systems "is very, very power-stingy."
If history is any guide, engineers will develop powering schemes that will extend the handset talk time and allow for more handoffs between Wi-Fi and cellular networks. The primary driver is the value of a product that can offer a business user a single phone wherever they are.
"People should be intrigued by the possibility, and the innovation in this area will be very robust now for the next couple of years, with a lot of investment in this area and a lot of venture capital, because there is some value here," McDonald says.
Although this unified phone technology may be in its toddler stage, it may quickly develop the legs to roam into wider enterprise applications.