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Wireless in San Diego

San Diego is arguably the wireless capital of America, perhaps the world. Despite a recent retreat at slow cadence due to weak market conditions, the local industry leaders are still vigorous in developing new products to serve new consumers in cyberspace.

Technology changes so quickly in this industry, I felt it necessary to return again to the annual conference on Evolving Markets in Telecommunications sponsored jointly by UCSD Connect, San Diego Telecom Council and San Diego Venture Group. Again this year, I was overwhelmed with more technical spiel and spin than I could possible absorb in one day.

To borrow a buzzword used by nearly every speaker, it was a "ubiquitous" experience.

Before you rush to your dictionary for it's meaning, at least in cyberspace lingo, let me acquaint you with my latest lexicon of new acronyms so casually tossed about in the live presentations and printed handouts. These are not found in your standard dictionary and often must be figured out from the context of their usage.

Last year my long list of odd acronyms included the industry standards such as DSL (Digital Service Line), GSM (Global System for Mobile Communication), and the Qualcomm bread and butter product, CDMA (Code Division Multiple Access). No use in understanding exactly what each of these systems does. Just know that each one speeds voices and data over wires or space to keep you very well informed in real time.

My lexicon from last year was inadequate for some of the new technology laid on several hundred conferees from the telecom (telecommunication) and VC (venture capital) world. Here are the new ones to try out on your 13-year-old, who probably knows all about them.

FSO -- Free Space Optics; ARPU -- Average Revenue Per Unit; Wi-Fi -- Wireless Fidelity, the technology for short range hook up between two wireless devices; OEM -- Original Equipment Manufacturer; SMS -- Short Message System. Add to those some more buzzwords like "Bluetooth" and "cool phone" and you are initiated into the inner sanctum of telecom marvels.

If I have sparked your curiosity over all this wireless gibberish, here are some practical definitions. "Bluetooth" is a wireless standard for short distance communication that replaces wires and cables. Those "cool phones" will have all the gadgets and capabilities mentioned above right in the palm of your hand. "Ubiquitous" means an omnipresence -- pervasive, and present everywhere in several places simultaneously.

Some may think that's the perfect description of the cellular-phone world today. Bell tones ringing in restaurants, drivers talking while driving, public areas filled with one-way conversations -- usually a loud "can you hear me now?" It's hard to escape.

There was no denying that a shadow of distress over the recent decline in the telecom marketplace troubled the Telecom 2002 speakers. Most traditional corporations took a nosedive on Wall Street while the smaller start-up companies lost a vigorous venture capital source to help them launch new products. In San Diego alone, the year 2000 brought in nearly $3 billion of venture capital for many incubator telecom firms and another $2.4 billion in the first quarter of 2001. Then the well dried up as global recession and consumer resistance to new products took over the rest of last year.

"The industry faces years of painful reorganization, confirmed The Economist in the current issue. Telecoms have run up debts of about $1 trillion then disgraced themselves by using fraudulent accounting tricks, continued the cover story.

Despite the dim economic side, optimism for the future was rampant at this year's conference. What is in the future for wireless devices? More color, bigger screens, more data transmission and less voice were the enthusiastic predictions.

I learned that cellular "phones" are no longer de rigueur in the trade. They are "devices" because they access e-mail, weather reports, stock market quotes, play computer games, and even take digital photos to send over the Internet in real time. Some products may still look like phones, but that is changing.

The conference keynote speaker was the head of an American affiliate of the large Japanese telecom corporation, DoCoMo. His insights into Asian markets for wireless technology and competition from U.S. manufacturers revealed a global challenge to the emerging San Diego industry.

Mr. Yoshikawa confidently announced that Japan has 71 million cell-phone users, and his company already launched the inaugural third generation (3G) mobile phone service at speeds ten times faster than the technology available in Europe and America. Troubles in the telecom industry have delayed 3G progress, so aggressively promoted by world markets.

Another speaker, Dr. Larry Smarr, founding director of a telecom think tank at the University of California, San Diego, confirmed, "The future is already here for wireless -- in South Korea." It seems that nation has taken a lead in marketing the latest technology and gadgets with a very high ratio of homeland users.

To help keep San Diego in the forefront of wireless innovation, Gov. Gray Davis came to town two days after the May conference to officiate at the ground breaking of a new California Institute for Telecommunications and Information Technology. A joint venture at UC San Diego and UC Irvine with federal, state and private funding, the sponsors hope the research facility will do for Sorrento Valley what a similar Stanford University facility did for Silicon Valley 50 years ago. Larry Smarr, who helped create the Internet, heads the UCSD institute.

The stock market has scalped many of the major telecom players in retribution for accounting distortions, slowing product demand, and mounting debt. The effect of scandals created by the collapse of WorldCom, Qwest and Global Crossing spread across the network like a virus. The Economist laid the blame on the liberal lending spree that supported a capacity glut of new infrastructure, followed by fierce competition and frantic price-cutting.

What advice did the panels of experts dispense at the conference? One speaker, Jim Murrell of VoiceStream Wireless (Deutsche Telekom), had a good idea in keeping with this year's theme -- Unlocking the $20 billion North American Wireless Data Market. He declared, "Price is prince, but content is king,"

I detected admissions from several speakers that technology in wireless jumped too far ahead of consumer appetites for new gadgets. Even the industry giants suffer. Eventually, profit making will overcome competition for new customers. That will force more takeovers and bankruptcies. Too bad that the current market glut of product and the related burden of debt is so ubiquitous.


Ford is a free-lance writer located in San Diego. He can be reached at johnpatrick.ford@sddt.com.

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