Many who are looking for "The Next Big Thing" in technology think they've found it in Wi-Fi. They may very well be right, but as The Wall Street Journal rightly points out today, don't expect it to spur any great revival of the tech sector.
Short for "wireless fidelity," Wi-Fi offers users untethered broadband access to the Internet in a wide variety of places. This is the technology that allows you to surf the Web on your laptop computer in McDonald's (NYSE:MCD) and Starbucks (NASDAQ:SBUX), for instance. SBC Communications (NYSE:SBC) announced this week it's expanding Wi-Fi's reach to 6,000 hotels, airports, and convention centers over the next three years. Verizon (NYSE:VZ), BellSouth (NYSE:BLS), and others are expected to follow suit.
It's not a stretch to imagine that someday relatively soon, most Internet access will take place via some form of Wi-Fi. So why isn't it creating a sonic boom? The Journal says the tech sector has moved from the "perpetual sense of revolution that permeated the Internet bubble," to "the elite titans co-opt[ing] breakthroughs accomplished by others."
In short, Wi-Fi won't be sparking the type of revival that allowed Microsoft (NYSE:MSFT) and Apple (NASDAQ:AAPL) to rise from small startups to tech behemoths during the PC revolution of the 1970s, aided by disinterest from leading firms such as IBM (NYSE:IBM).
Instead, established giants such as Intel (NYSE:INTC), Cisco (NASDAQ:CSCO), and Microsoft have met the challenge head on. Cisco recently bought out Wi-Fi component maker Linksys Group, for example. Meanwhile Intel's heavy promotion of its Centrino processor likely played a factor in Intersil's (NASDAQ:ISIL) decision to exit the Wi-Fi chip business it dominated.
Wi-Fi equipment maker Netgear (NASDAQ:NTGR), spun off by Nortel Networks (NYSE:NT) in 2000, pulled off a successful IPO last week. But it may prove to be one of the few small fish able to survive with the sharks.
Do you agree with the Journal's assertion that very few small companies will reap big Wi-Fi rewards? If not, which stocks have the best chance to benefit? Drop by our Wireless World discussion board and have your say.
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