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Feature

DECTweb brings you occasional  feature articles from well known names in the cordless telecommunications industry.   If you would like to offer an article for consideration please e-mail us with your biographical details and an outline for the proposed feature. 

The current feature is contributed by Dominic Clancy, International Product Marketing Manager with Philips Semiconductors, and addresses the issue of why data is of importance to the cordless industry.   Dominic has been involved in cordless telecommunications since its inception, having undertaken the first market studies back in the 1980's and having previously worked for BIS-Mackintosh (now part of the Giga Group), GPT and Motorola. 

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WHY IS DATA IMPORTANT FOR THE
CORDLESS COMMUNITY ?

by DOMINIC CLANCY
Philips Semiconductor

Introduction
     As the telecommunications world becomes more competitive every day, it
     is also clear that data also has a higher profile in our lives.   All
     the telecom operators already see that the level of data traffic on
     their networks is increasing - to the point that in some countries,
     that data traffic exceeds the level of voice traffic in the network.
    
     In a parallel development, the cellular operators are increasingly
     targeting the market for residential users.  By reducing their
     off-peak tariffs, and by introducing home-cell tariffs, they are
     starting to offer their customers residential telephony through their
     cellular service at no cost premium.  This gives these cellular users
     the real option of dispensing with the fixed line for voice traffic. 
     The cellular operators are therefore starting to target the core of
     the cordless market, the home user of the simple cordless telephone. 
     In the words of one operator :
    
     "90% of all mainstream communications - data as well as voice- will be
     on wireless networks, with most households having more than one mobile
     phone"
    
     The attraction for the user is clear - in many cases a subsidised
     cellular handset and service costs the same (or less than) a cordless
     phone.  Cellular is increasingly used by students and young people as
     the ONLY phone they have, and as they get older, there is little
     obvious reason for them to change their telephony habits.   This view
     is reinforced by a study in the USA that concluded that 42%of
     Americans would switch to mobile services if the price was comparable
     to fixed line service.  For the cellular handset manufacturers, the
     existing volume of cordless phones would also be a nice addition to
     their annual sales!
    
     The cellular community  however has a significant weakness in its
     armoury.  The existing cellular systems are unable to compete with the
     V90 modem technology of the fixed network.  The data rates are low,
     and to increase them significantly requires channel combinations that
     make the service financially unattractive for mainstream users.   There
     is also the question of how the cellular networks would perform in the
     presence of  large numbers of data users in multi-channel
     applications.  So it is in the area of data that the fixed line
     operators have their advantage, and the cordless terminal
     manufacturers have to look for their long-term survival.
    
     This analysis is not altered by initiatives such as Bluetooth from the
     cellular community. Bluetooth addresses the connection interface and
     physical difficulties of getting your cellphone to communicate with
     your laptop easily and at low cost  (sometimes referred to as the end
     of "Plug and Pray").  But it does not address the issue of  relatively
     low data rates on the cellular network, even under the new packet data
     standards that are now to be introduced.  It is of course acknowledged
     that in a mobile environment, convenience and mobility is the main
     selling point, but once those benefits are not the primary
     requirement, cellular technology and Bluetooth become less attractive
     a solution.
    
     In the business world, there are many examples where cordless service
     has brought real productivity and service improvements.  But the
     majority of the PBX  suppliers are ill positioned to help the customer
     realise the full benefits of cordless.  This would require a sales
     approach more like the systems integrators of the computing world. 
     Not only are these skills in short supply in the PBX sales force of
     the world, but the whole PBX distribution process  is not well
     oriented to this type of solution.
    
     It is also notable that in most cases where data has been offered as a
     cordless product offering, it is in conjunction with ISDN.   This
     reflects an obsession with high end telephony offerings, which is
     unfortunate.   This is partly a result of the high cost of the systems
     (which have therefore been forced to a high end market positioning).  
     ISDN data represents a niche of the whole data market, cordless ISDN
     even more so.  Many data communication applications never go near a
     telephone line at all!  In  most cases they are between devices, in an
     office, in a factory, in a store.  In the small business sector, the
     focus is also on basic services, rather than "high end" systems.  It
     is also expected that those systems that do (or will in the future)
     require a telecommunications service will in any case look to achieve
     higher data rates than are currently provided by ISDN.   These services
     will be provided by a variety of links, for example by Cable TV
     systems, through xDSL local loop technology, and through wideband
     satellite or microwave services.  These requirements will be driven by
     the PC world, rather than the telecommunications world; by the
     internet rather than by voice.
    
     So what are the key success parameters for cordless in the future, in 
     particular in the world of data ?
    
     It is first important to identify the market segments.   Suggested as
     segments are the Home user, the small business user,  the mobile user,
     and large corporations.  In addition, there is a segment comprising a
     huge community of integrators who are so far poorly targeted by the
     cordless community.
    
     The Home User
    
     The home user is actually a very wide market segment, with a diverse
     set of requirements and applications.  The most fundamental of these
     is convenient connection of the PC and modem to the telephone line
     without running cables.  The most sophisticated is a fully cordless
     communications system linking together all the devices (PC and Audio
     Visual) in the home.
    
     A high proportion of these needs can be met with cordless technology. 
     For example, Philips uses the same chip that is built into residential
     DECT phones for data products.  The software that provides handsfree,
     caller line identification and conference calling is replaced by one
     that handles serial data transparently through the system.    The
     difference is the software on the chip, so the data equipment
     manufacturers are able immediately to take advantage of the high volume
     residential business and the resulting low prices for the chips.   The
     same radio parts are used in both residential and data product.   DECT
     cordless is able to offer speeds already up to 512kbps, and with
     modifications coming to the standard, 2Mbps will soon be possible.
    
     For the higher speed  in-home data connections, particularly for
     audio-visual applications, other standards are likely to be used, as
     these are predominantly supported  by the Consumer Electronic
     manufacturers.  The main ones of these are Sharewave and   IEEE1394.
    
     Small Business
    
     For the small business, the main requirements are for data and voice
     in a single system.  In contrast to many other earlier attempts at
     such systems, the  systems have to be low cost, cheap and easy to
     install and maintain, (even such that the non-technical small company
     owner can install a system themselves) and above all easy to
     understand even for the technophobes.  Voice is essential in these
     systems, but with the increasing use of email in ALL companies and
     industry sectors, data becomes a requirement in even the smallest of
     products.
    
     The Mobile User
    
     The mobile user that I identify as a segment is NOT a cellular user. 
     Rather the mobile user is one who goes from point to point with
     specific (and closed) communication requirements.  The easiest to
     picture is a meter reader, who could go along a street in a van to
     read the meters very quickly for all the household utilities, using a
     cordless link.  It is expected that such co-operations in billing
     services will be the shape of the future, and there are already
     independent organisations offering these services to the utility
     companies.  So far they do not use wireless services extensively, but
     it is expected that this will be common in the future.   Vending
     machine companies are another target - it is calculated that one
     person can fill 40% more machines in a single day if they go to the
     machine just once, with exactly the right supplies to replenish the
     machine.  Cordless data is the ideal technology to provide this
     service.
    
     The mobile user is also a  good example of the need to sell cordless
     technology actively to the integrator community.  There are many
     thousands of different data applictaions that are dreamed of every
     week by hundreds of different companies throughout the world.  
    
     So far the cordless community has only scratched the service of these
     applications, and has made very little of the opportunity that exists
     here.  The majority of the systems are already existing - without any
     wireless capability.  But in adding the wireless capability,
     integrators can greatly increase their value-added, and make their
     current products more in tune with the emerging needs of their
     customers.
    
     There are many more applications for data transmission than voice. 
     "Data, not voice, will be the primary form of traffic" according to
     Dataquest's analysis of internet and interactive technologies.   It is
     believed that with products that seamlessly replace cables with
     cordless links in these simple systems, many more integrators will
     incorporate cordless capability into their existing products, and will
     develop new applications based on cordless capability.  This is the
     idea behind the Philips Semiconductors  "Virtual Cable" product.
    
     Large Business
    
     This leads on to the question of why cordless is not perceived as a
     need in large business.  This gact is constantly reported by various
     analysts, who also report similar low density penetration of cellular
     in this segment.  The reasons are various, but I will try to summarise
     them. First, all large corporations are sensitive to financial
     implications of introducing systems where they cannot easily control
     the  cost or quantify the benefit.  Often those responsible for the
     financial implications are not the ones to benefit from the
     introduction of the system!  Second, the sales approaches taken to
     this sector are often inadequate to overcome this basic objection, and
     are often a by-product of selling to a different segment.
    
     Thirdly, larger corporations often have integrated information
     systems, and look to see new data or voice technologies appropriately
     integrated.  This is very seldom offered, because the providers of the
     data system have no knowledge of cordless, and the providers of the
     telephone system usually have no knowledge of the data systems.   The
     role of the Systems Integrator is a useful one here, but such a
     function does not exist in the telecom world.  So the real answer to
     why cordless is not perceived as a need in this segment is NOT that
     the need does not exist, merely that it has not been correctly
     identified and packaged as an integrated product. 
    
     This is difficult for many integrators to do, because all the cordless
     manufacturers have made integrated products themselves for one
     application only - the PBX.  The rare ones who have made wireless LANs
     have seen their market rapidly eroded by the integration of ethernet
     cards in almost every PC, and the growth of  less complicated cabling
     architectures has further reduced the available market.
    
     So why is data important for the cordless community?
    
     The cordless market continues to grow at a tremendous rate, and
     increasingly the trend is that digital cordless replaces analogue as
     the product offered by the retailers.  The cellular operators across
     Europe also look to the residential users market as a new growth
     opportunity.  In providing voice only services, their offering is
     attractive, particularly among the young. .In the provision of data
     communications, cellular services are not attractive except in
     applications where wide area mobility is an issue.  In a world that
     increasingly uses the internet as a basic tool, and where wireless
     connectivity is a commmon feature of many consumer electronic devices,
     cordless technologies are able to fulfill many of the expectations of
     the emerging cordless data / home wireless networking market.
    
     Philips Semiconductors supports this vision in its products for
     European and US cordless standards.  We believe that cordless data
     will in time become a standard feature in a cordless telephone, in the
     same way that digital answering devices are also becoming standard in
     residentail base stations.  By offering such functionality, we believe
     that the cordless community can offer consumers products that will
     make them less tempted by the enticements of the cellular world.
    

About the Author
     Dominic Clancy is International Product Marketing Manager in the
     Telecom group of Philips Semiconductors, based in Zurich, Switzerland.
      The groups products include chipsets for digital cellular, digital
     cordless, digital answering machines and wired telephony products.

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