Welcome all to the new year. In the Chinese calendar, this is the year of the sheep. For the high-tech calendar, hopefully, this is the year of the turn-around.

As 2002 closed, the wireless industry's vision of the future still wasn't clear (at least, that is the impression of the cooler heads within the industry).

It was an interesting 2002. It was a year of head scratching. It was a year where the traditional economic theories didn't play out. All the signs of a rebounding economy were there (on paper), yet the economy didn't rebound. Many economists, CEOs, forecasters and fortune tellers are still dumfounded as to what why things aren't following the traditional models.

Personally, I think the answer is pretty obvious. People are returning to their traditional roots. They've been stung with staggering reductions in worth (over $7 trillion worth in the last three years), job layoffs and dismal growth forecasts. They've just reigned in their horses, and will hold them at a walk until the fog of uncertainty disappears.

Recall that the November elections left the Democrats stinging while the Republicans came away with a resounding victory (conservativism tends to resurrect in difficult times). Mr. Greenspan took another 50 basis points off the prime lending rate and, as of press time, the the holiday shopping season has been lackluster. Consumer spending on emerging technologies isn't even a blip on the radar screen (yada, yada) and the stock market may have tempered, but it still hasn't recovered. If all these factors don't point to a conservative mood, I can't image what does.

Now, IMHO, the question becomes one of guessing what consumers will spend their hard earned dollars on in 2003.

I'm willing to bet it won't be 3G. Of course, there will be some movement in full color wireless phone displays and enhanced cellular services, but I wouldn't bank my company's future on it. Based upon last year's performance, it's pretty safe to assume that the consumer wants value and convenience — at least for a while longer. As much hype as there has been about 3G, in reality, the consumer still uses mobile phones primarily for voice communications.

So, where do we look? The one area that has shown some promising activity is the 802.xx WLAN market. Last month I touched on the fact that WiFi is positioned to be a major player in the last mile market. I feel it could be the sleeping giant that awakens this year and not just for the last mile. Otherwise, would A&T, IBM and Intel, along with two investment companies, Apax Partners and 3i, (http://www.msnbc.com/news/843611.asp) take a gamble at forming a new company called Cometa? Their plan is simple: deploy over 20,000 Wi-Fi hotspots in the 50 largest cities and wholesale wireless data to whoever wants to buy it and resell it.

According to the Instat/MDR (www.instat.com) report, WiFi and Linksys rule home networking hardware mareket 2002 “wireless LANs are emerging as the fastest growing category, with 802.11b products currently accounting for the vast majority of all wireless LAN products sold.” And, according to Forward Concepts Co.'s (http://www.fwdconcepts.com) study of the WLAN equipment and chip markets reports WLANs will be wireless data's silver bullet.

WiFi is generating high revenue growth now because it hits the sweet spot in terms of cost, power consumption, data speed, range and readiness for deployment. About 40 percent of the notebooks shipped this 2002 incorporated 802.11b wireless radios.

Hmmm, they just may be on target, this time. Why? Well, first, there is a reasonably diverse offering of products and suppliers. Second, the standard is IEEE developed and sanctioned, so it is reasonably solid (except for the security element and some interference issues). Third, hooking up a home network via the good ‘ol Cat 5 Ethernet is a pain, especially in multi-floor dwellings (and especially if you're not pre-wired), whereas wireless is much less restrictive. Fourth, 802.xx (and, Bluetooth now) is getting much cheaper to integrate into a diverse set of appliances, that are not just in the computer segment, allowing computer/appliance integration. Fifth (and most importantly) it provides a tangible service to the consumer (more so than games on a radio). Device internetworking adds value.

Now, 3G will come along, there is little doubt about that. However, again IMHO, there won't be a lot of opportunity for it until the consumer has regained confidence, and finds a need for it. I think 2003 will be mostly a replacement/update year for the handset market.

WiFi and Bluetooth, on the other hand, can add practicality, time-savings, efficiency and simplicity. What it offers isn't fluff — it's meat.