Seattle WiFi users wake up and smell the coffee
We’ll send you a myFT Daily Digest email rounding up the latest San Francisco news every morning.
The Victrola neighbourhood coffeehouse in Seattle, Washington, no longer serves wireless internet access on weekends with its lattes and espressos. Gradually, over two years, the sprawl of notebook computers had spread across nearly all of its tables, choking conversation and forcing the owners to turn off the radio signal to preserve their café culture on Saturdays and Sundays.
The Joe Bar café nearby has taken similar steps to limit its WiFi hours for Seattle, the capital of coffee and home of Starbucks, has become the number-one city in the US for business people and consumers to connect wirelessly to the internet.
In the Unwired Cities rankings issued last week, Seattle pushed San Francisco into second place, with Austin, Texas, third and Portland, Oregon, fourth. Rainy days, the popularity of coffee-based computing and the proximity of Microsoft in Redmond were all cited as reasons.
But further statistical evidence suggests that America as a whole is adopting the new technology. T-Mobile USA, the biggest provider of WiFi hotspots with 5,700 in the US, will today announce a big surge in usage over the past six months as consumers follow the business community in embracing wireless internet connectivity.
While there have been more than 15m connections to its service since the launch in 2002, 8m of these took place last year and 3m in the last three months. The average online session now lasts 64 minutes, up from 45 minutes in 2004; a typical session costs about $5 (€4.12). The amount of data moved over T-Mobile's networks has grown from 11 terabytes in January to 17.5 terabytes in May or the equivalent of nearly 5bn pages of text.
“WiFi has experienced an inflection point,” says Joe Sims, general manager of T-Mobile HotSpot. “A lot of people were wondering when it was going to hit mainstream adoption and some kind of ubiquity and that's what we have been noticing over the last 90 to 180 days.”
One reason for WiFi taking off is that people are suddenly buying more portable notebook computers than desktop machines. The Current Analysis research firm reported last week that notebook sales were 53 per cent of the computer market in the US in May, up from 46 per cent a year ago. Prices have dropped 17 per cent in the last year, while the number of wireless-enabled notebooks has risen from 80 per cent to 95 per cent.
“We are reaching some sort of tipping point; with all these WiFi-enabled laptops, there's this pent-up demand of people walking around with them looking for a place to hook up,” says Bert Sperling of Sperling's Best Places, which carried out the Unwired Cities survey.
Intel, the world's biggest semiconductor company which commissioned the study, said last week that its wireless notebook chips, known as Centrino, were driving better than expected revenues in the current quarter. Centrino has been a big success for Intel, although it had to spend $400m on a marketing campaign after its launch in 2003 to raise consumer awareness of WiFi from near zero to more than 80 per cent.
“Centrino was the right product at the right time and we spent an ungodly amount on advertising,” says Sean Maloney, head of Intel's Mobility group.
WiFi still appears to have some way to go before hotspot owners enjoy the same kind of financial success as Intel. T-Mobile will reveal user numbers for the first time today about 500,000 people have used its service within the past 90 days but will not say whether it is making a profit yet.
The mobile operator's move into WiFi was greeted with scepticism by the industry. But Mr Sims says there have been significant benefits for its main business, with a 40 per cent probability that users of its WiFi hotspots would go on to sign up for phone accounts.
Voice-over-IP, or internet phone calls using notebooks and hotspots, could eventually eat into the mobile operator's main source of revenues, but the large amounts of data moving across its WiFi network are thought to be mainly users sending photos with their e-mail or listening to music and watching videos online.
More multimedia uses are also being supported by a wider range of WiFi-enabled devices. Kodak is introducing a WiFi camera in October that will detect hotspots and ask users if they want their pictures uploaded to the internet. Sony is enjoying booming sales of its WiFi-enabled PSP handheld game console.
The WiFi landscape of seas of laptops in coffee shops is changing as devices and locations become more diverse. Cameras can upload pictures from baseball parks, gamers can play opponents while waiting for the final rinse at the laundrette. “Wireless is becoming a fundamental part of how we live,” says Mr Sperling.
Get alerts on San Francisco when a new story is published