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Expert: Businesses must look before leaping into Wi-Fi

A number of well-known companies, like McDonald's and Starbucks, are providing wireless access to customers, but one research firm says they could be trading core revenue for empty wireless buzz.

Wireless hot spots are beginning to show up in more and more places: phone booths, Starbucks coffee shops, even McDonald's restaurants. But some of these businesses may be trading revenue for an empty wireless buzz.

Rob Bamforth, a senior analyst with the Bletchley, England-based research firm Bloor Research, said that companies need to consider whether providing their customers with Internet access via wireless LAN nodes (known as hot spots) will enhance or detract from their core business before they simply slap up a hot spot and encourage their customers to log on.

"So many businesses are getting into it without really knowing why," Bamforth said.

Businesses like coffee shops run by Starbucks Corp. are a perfect example, Bamforth said. In London, as in many cities, Starbucks occupies some of the most expensive real estate, with locations in tourist destinations like Leicester Square. The company's higher-value products, like sandwiches and cakes, require that Starbucks offers customers a place to sit, but the more people cycle through the coffee shop, the more food and beverages it will sell.

Contrary to that plan, Bamforth said, Starbucks is encouraging its customers to boot up their laptops and browse the Web, spending more time in its cafes. Companies should use wireless hot spots to augment their existing business models, not to detract from them, he said.

Airports are far more suitable for hot spots than coffee shops or fast food outlets like McDonald's, which made its name shuttling people in and out of its restaurants quickly, Bamforth said. In an airport, people are waiting for flights and would be there anyway, he said. Adding a wireless service allows the airports to generate revenue from those people while they wait.

Other companies, such as betting shops (gambling is legal in the U.K., and betting shops are a mainstay for most towns and cities) could also use wireless LANs to enable their customers to access background information on the things they are gambling on, or even to place bets, he said.

Part of the problem today is that laptops, which are the primary devices that people use to access the Internet over wireless LANs, are cumbersome. They require the user to be seated or to have a table, and they take time to boot up and shut down.

When people have handheld devices that can simply log on to the system, display information and log off quickly, wireless LANs will be less disruptive to a company's existing business model, Bamforth said.


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