AirRover Wi-Fi Corp. (formerly Air-Q Wi-Fi Corporation) is a development-stage company that develops and operates wireless Internet access systems. It provides Wi-Fi Internet access in Louisiana, Arizona, Maryland, Pennsylvania and Washington, D.C. AirRover's "Wi-Fi" (hotspot) Internet access system operates on a platform comprised of Wi-Fi standard equipment that has been configured in a proprietary manner. The term "Wi-Fi" (wireless fidelity) refers to an industry standard for wireless equipment that meets published 802.11(x) standards. Wi-Fi equipment operates in unlicensed spectra, such as 2.4 and 5.8 Ghz. AirRover's business plan focuses on the marketing of its wireless Internet access services to businesses and residential customers, as well as to visitors to its markets with Wi-Fi compatible laptop computers and other wireless devices.
The question for investors is, how do we make money with it? Right now, there are some very thorny questions and few answers. Yes, wi-fi is soon going to change our lives - perhaps as much as did cellular, or even the internet itself - but getting from here to there is going to be a rocky road.
First, what is wi-fi? It's a radio signal that transmits Internet access up to 100 meters or so. Connect it to a broadband modem and wi-fi enabled computers and devices within range can log on. The possibilities are mind-boggling - just use your imagination.
But there are issues. Wi-fi vs cellular's upcoming 3G. Wi-fi vs bluetooth. And within wi-fi, you've got different standards - 802.11a vs 802.11.b vs 802.11g. Plus there is a huge concern over security. Until security gets solved, business users especially will be reluctant to adapt. But one of the biggest issues - and biggest opportunities - seems to be centered on "hotspots" - the access points for those radio signals.
Private access points - home and office - are growing at an astronomical pace. Paul Otellini, President of Intel (Nasdaq: INTC) stated in an address last June that "There are 27,000 wireless access points being added every day which means one every three seconds." And why not? The convenience is great and the cost of the hardware is dropping so quickly, it shouldn't be long before it's simply included in the price of the computer.
Public access points, known as hotspots, are also growing but much faster in Europe and Asia than in North America. Locations are literally all over the map, ranging from hotels and airports to coffee shops and airplanes to you name it. Cometa Networks (http://www.cometanetworks.com/), a joint venture made up of Intel (Nasdaq: INTC), IBM (NYSE: IBM) and AT&T (NYSE: T) as well as other blue chip companies is planning a nationwide network of 20,000 hot spots in the U.S. over the next three years.
Although hot spots are relatively cheap to set up, the pace of growth is sluggish because there are several key problems that need to be resolved. Pricing ranges from free (one hour at Macdonald's) to very high. The industry is extremely fragmented and seamless service is virtually nonexistent. Plus if you're not a techie, getting connected can sometimes be difficult.
For investors, one hotspot operator to keep an eye on is AirRover Wi-Fi Corporation (formerly Air-Q Wi-Fi) (OTCBB: AVWF). They have an "agreement in principle" with ISP MyMart to install 1,000 hotspots nationwide. A more conservative approach to riding the wi-fi wave would be to invest in chip makers (Intel's Centrino chip has boosted shares greatly) or PC and device manufacturers who stand to benefit from the increased demand that wireless should provide.
The really good news is that wi-fi will be a catalyst for growth in many tech sectors. It transforms just about anything from PDA's to watches to cameras into a wireless network device. Plus it will lead to demand for more always-on broadband. So in an industry where investors are always thirsting for the "next big thing", it will no doubt come with wi-fi. Exactly how it will happen is anyone's guess.
