AT&T Wireless: Not Just for Handsets Anymore

Cue the fanfare: AT&T Inc. is putting its considerable weight behind the idea of embedding wireless into everything from digital cameras to audio systems with a new unit focused on “emerging devices.” But can the 3G network handle it?

We’ve heard it all before: Putting standardized wireless modules into consumer electronics will create an explosion of applications and turn business models on their proverbial heads with an open, unsubsidized, unlocked endpoint ecosystem that goes far beyond the handset. It’s the promise of 4G wireless. But AT&T is tweaking that in two important ways: In its announcement on Wednesday that it has appointed Glenn Lurie as president of AT&T Emerging Devices, National Distribution and Resale, stopped short of the open device idea and said it will put this plan into action over its existing 3G GSM-based network.

The strategic initiative will initially focus on personal computers, mobile Internet devices or mini computers, in-car entertainment and navigation systems, cameras and machine-to-machine communications solutions. AT&T will select a device to enable, then work with manufacturers to get distribution for it through the operator’s 2,000 company-owned retail stores and agreements with Best Buy, Wal-Mart, Costco and RadioShack, as well as multiple resale relationships.

More interestingly, the decision to leverage 3G rather than wait for its LTE network to be built is an interesting one. 4G networks like those based on WiMAX and LTE offer a flat, all-IP architecture that is more spectrally efficient than 3G, capable of carrying a much higher volume of packets on an equivalent pipe, meaning it can support a range of simultaneous bandwidth-hogging IP applications in an efficient manner. 3G is not as much of a never-ending bandwidth resource, which raises the specter of congestion and bandwidth throttling when you envision a world of widespread built-in wireless, driving ever-higher usage.

“High speed wireless broadband service can enhance a huge variety of gadgets,” said Lurie, in a statement. “There is also a host of exciting new applications — from social networking to navigation to location-based solutions — being developed that will rely on wireless connectivity.”

It could be a move on the part of AT&T to gain some mindshare in Sprint-Nextel Corp.’s ongoing and loud message of open device development and tapping the consumer electronics marketplace for its WiMAX network. But it remains to be seen if the AT&T HSPA footprint will prove a deep enough resource to handle large amounts of data traffic if the idea takes off.

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