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Sunday, December 19, 2004

Why Wi-Fi will win.

Once people made a Market. Needs made the Future.
Now no more.
In this society of the "Must Have" what makes the Market's rules is not anymore what people want, but what they are "invited" to want.

And what they want is generally what they do not have, something new, which generally will be in the place of the "old".
So that the garbage can is never empty and there is always something new to produce, because there is always something new to consume.

At the end of every year and the beginning of the next, there is a game in forecasting the future possibilities of the Market.
And we come very often to the most extravagant predictions, like "we will be able in the near future to look at TV on our portable phone".

Now, syllogism is a complicated sequence of logical conclusions, whose characteristic is that you start from a perfectly reasonable statement and, through surreptitious assumptions you gradually change the reasonable nature of your first figure until you reach a complete distortion which can be utterly unreasonable.

For example "TV is a highly requested and used medium", the portable phone is a "widespread and ubiquitous tool to communicate" so, putting together two successful mass market products, you would be sure to have a greater one.

Syllogism is one thing and reality can be totally different.
In an age where the tastes of the people are daily more sophisticated, where an analog TV is an obsolete tool, is quite unrealistic to think that somebody would enjoy a TV program on such a small screen as the phone's.

But one thing is sure and shouldn't be under valuated by investors: the Market badly needs something new to promote, to sell, to "invite" the people to consume.
And the future is there, clear and inviting.

There are several requirements to fulfill to give life to a new product:

It must be something alluring.
It must cover the expectations of the mass.
It must be at an affordable price.
It must be easy to find.
It must be easily reachable.
It must fit with our life.
It must be well commercialized.

Entertainment has been since long a safe investment, and TV, Cable, Satellite have been since long the way to deliver what goes under the name of "home entertainment".

The Internet is the new medium facing the future and alluring investors.

It needs three main conditions to fulfill its promises:

1) Content. But that is already available.

2) A good and high compression for the big files.(mostly video)

3) A cheap broadband mean to deliver content.

And at point 3 is where Wi-Fi comes into the picture.

Because point 1 and 2 are already available and the Market is eager to change channels.

Content needs badly a broadband delivery and Wi-Fi needs badly content to deliver.

Take for example a rural location with an average of 10.000 people.
If you deliver fast broadband Internet with a Wireless system you will have
an investment of X, N users/customers and a ROI of Y.
But if you deliver high quality content, for example, good quality and low price VoIP (best if wireless) movies on demand, music programs, you will have the same investment X in infrastructures, but N² users/customers and Y³ ROI.

A market product can only be understood backward, but must be planed forward.



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