IBM plans to blast away mobile net hype

IBM will spend $1bn over the next two years in an attempt to achieve success in the fast-growing European mobile internet equipment and services market.

The computer giant will dedicate 4000 staff to mobile technology in Europe, including Wap and third-generation (3G) mobile. IBM said mobile internet is a "must-win" market.

Big Blue will work with partners including Ericsson, Nokia and Cisco. It will invest in research and development of technologies such as voice recognition, secure connectivity and encryption. The company will also spend the money funding startups in the mobile internet space.

A mobile infrastructure development centre will be established, called the Solution Integration for Mobile Infrastructures centre. IBM also plans to form a response team to help customers develop services based on Wap technology.

During recent months analysts have warned that Wap technology has been over-hyped, leaving users with elevated expectations. Research company Ovum warned that many users have misinterpreted the capabilities of Wap and early adopters may face a user backlash.

Val Rahmani, IBM Europe's vice president for telecoms and media products, said: "There has been a lot of hype with people making promises that you can do everything on the mobile phone when you can't. But this hype is good as it can help move the market forward faster. This market is ready to explode from hype to reality."

According to Rahmani, customer interest in Wap services and products has increased dramatically during the past few months. "Everyone wants to do something and there has been incredible interest and big investments made. People will soon see exciting, smart and valuable services," she said.

IBM is also investing in 19 of the telcos bidding for 3G operating licences across Europe to help build the infrastructure of the new networks. Rahmani would not reveal which, if any, 3G licence holders in the UK the company is investing in.

Frost & Sullivan predicts that revenue from mobile electronic commerce will rise from $2.98bn in 1999 to more than $64.4bn by 2005.