City voices concern overslow take-up of the mobile internet

<i>News analysis: </i>Internet-enabled phones have failed to live up to pre-launch hype but the fax and PC were also slow starters
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The Independent Online

Douglas Adams, the author of the bestselling Hitchhikers' Guide to the Galaxy, might not seem the most obvious champion of internet-enabled mobile phones but he is billed in precisely this way in the latest issue of Time magazine.

Douglas Adams, the author of the bestselling Hitchhikers' Guide to the Galaxy, might not seem the most obvious champion of internet-enabled mobile phones but he is billed in precisely this way in the latest issue of Time magazine.

A profile of the author's new internet venture, an online guide called h2g2, recalls that in his original book published in 1978 researchers and travellers roam the galaxy armed with mobile electronic devices, beaming in reviews which are instantly available for anybody to read. What was merely a narrative mechanism for Mr Adams has turned into reality thanks to internet-enabled mobile phones.

Not that Mr Adams sees himself as a prophet. "I didn't foresee the internet," he says. "But then neither did the computer industry. Not that that tells us very much of course - the computer industry didn't even foresee that the century was going to end."

Joking aside, there is a danger that the dream of the much-hyped Wireless Application Protocol, is already turning sour. There have been a flurry of negative announcements in recent weeks which have suggested that consumers may be more reticent about adopting mobile internet technology than initial bullish projections suggested.

Last week Nokia, the Finnish mobile phone maker, shocked the markets when it warned that handset sales would not be as strong as expected in its third quarter. The shares fell a further 3.9 per cent yesterday.

On Tuesday, UBS Warburg cuts its share price target for ARM Holdings, the chip designer, citing disappointing debuts for the next generation of mobile phones. This prompted an extraordinary response from ARM's chief financial officer, Jonathan Brooks. "We never thought these things were going to roll out quickly anyway," he said. "I personally never thought WAP was going to be a big thing."

The mobile operating companies admit being disappointed with their WAP-connections so far. Orange claims it has about 80,000 WAP-enabled phones in use in the UK while BT Cellnet says it has 175,000 though many of these have been given away.

It is not just the UK that is uncertain. In Germany the auction of the third-generation mobile phone licences is proving a much more cautious affair than was the case in Britain with the total bids reaching DM4.8bn (£1.5bn) by the end of yesterday's rounds. It is also understood that the average usage per active WAP-user on Vodafone's German subsidiary D2 is less than a minute a day, barely enough to dial up and then give up.

What has gone wrong? The problems are similar to many new technologies where the reality does not quite live up to the hype. In the case of mobile internet, the phones are difficult to use, often unreliable and slow.

Even Hans Snook, chief executive of Orange acknowledges that WAP-phones are far from perfect. "This is par for the course with new technologies," he says "They tend to ramp up slowly, even if there is some hype from certain parties. There are always glitches and the technology is not as easy to use as people had hoped. We have seen this before with the first mobile phones in 1984-85. People were calling them the biggest white elephant we've ever seen. A year later everyone was saying what a great business it was to be in. It was the same with PCs and faxes."

Christian Maher, a telecoms analyst at Investec Henderson Crosthwaite agrees. "It is like most new technologies. People hype it, then it tails off, and then it comes back. With mobile phones the market has always come back bigger and better than previously forecast."

The crunch will come early next year when the new GPRS networks begin operating offering phones whose internet access is "always on" thereby avoiding the need for slow dial-ups. This system was supposed to be able to download information 10 times quicker than current speeds. But more recent estimates have been much lower, suggesting just 2-3 times current speeds. Keith Woolcock, a technology analyst at Nomura International, says. "The speeds will not be anything like the forecasts unless you are stood rigid right next to a base station. The great dream of streamed multi-media will remain a dream."

Hans Snook says the mistake has been to compare mobile internet only with what the existing PC-based internet can do. He points to the development of voice recognition and voice interactivity as the key developments that will take mobile internet far beyond its current confines. "One day we'll be able to conduct transitions and get information via thought transfer," he says, meaning you will be able to "think your commands into your mobile phone or PC without the use of a keyboard "Scientists are already working on this with some success."

WAP's problem is that its potential is so great that initial experiences were destined to disappoint. While most technologies have a relatively long gestation period, usually measured in many years, WAP's development from concept to high street, has been compressed into a matter of months. As one analyst says; "WAP has always had to live in a goldfish bowl. It has had to do its growing up in public."