Average selling prices for Wi-Fi chips will drop by half, to $8 this year, $4 next year and as little as $2 in 2006, predicted Sky Dayton, chief executive officer of Boingo Wireless Inc., a Santa Monica, Calif., startup seeking to establish the underpinnings of an 802.11 roaming service. The company now has deals with 2,600 hotspot operators, Dayton said.

In a panel discussion, Dayton estimated there are now 5,000 hotspots in the United States, but said that number must double in key areas such as airports, hotels and conference centers to get Wi-Fi to critical mass. "We're working with OEMs to create a hotspot-in-a-box that will have access points and everything you need for well under $200," Dayton said.

Intel Corp. president Paul Otellini reiterated his company's support for 802.11, which is integrated into all of Intel's Centrino notebook chip sets. "We are jumping in front of the parade," said Otellini. However, he acknowledged, "Wi-Fi is in danger of being overhyped and to some degree we may be guilty of that by spending hundreds of millions of dollars on our Centrino advertising campaign."

Intel is mandating wireless connectivity in all its new buildings, Otellini said. "It's the cheapest way of connecting, and I believe other people see this too."

Whether 802.11 will be integrated in next-generation cell phones was a source of debate among Telecosm panelists. "I believe Wi-Fi will become a standard component of cell phones in the future," said Dayton.

'Waiting for the carriers'

But Paul Jacobs, executive vice president of Qualcomm Inc. (San Diego), was less certain. "Basically we are just waiting for the carriers to ask us to put it in [Qualcomm's] chip sets," he said. "I think we'll see the demand for it eventually, and we have already built the cores for it."

Otellini noted a shift over the last 18 months in his discussions with carriers about including Wi-Fi in cell phones. "They have moved from saying 'heck no,' to seriously considering it," he said.

Jeff Belk, vice president of marketing for Qualcomm, argued that users will prefer an $80 CDMA card that supplies broad geographic coverage with hundreds of kilobits/second of data to fixed-location 802.11 links. In addition, Wi-Fi's megabit bandwidth capabilities are choked by slower DSL back-end connections, he said. Jacobs of Qualcomm said carriers may want to support Wi-Fi links as a way to offload data traffic, potentially lowering infrastructure costs for themselves and long-distance charges for some business users.

"I was in the lobby of this conference center today making a VoIP [voice-over-Internet Protocol] call over Wi-Fi," said Otellini. "This is happening a whole lot faster than most people thought. And we are working on 802.11 variants that are in the milliamp power range."