GPRS provides a faint gleam of light on gloomy horizon for info-tech sector

The opening speech from Carly Fiorina, chief executive of Hewlett-Packard, last week at CeBIT, the annual showcase for information technology gadgets and trends, in Hanover, Germany, was exactly what Europeans least wanted to hear.

"This (US) slowdown is now clearly spreading to other parts of the world . . . Candidly, I am not optimistic about Europe's ability to withstand a slowdown," she said.

That ominous sense about the US slowdown pervaded the conference. Perhaps the most visible sign of the change came in the last-minute withdrawal of several hundred exhibitors and the emptiness surrounding Internet stands.

"Last year, Hall Six was the Internet hall. It was where all the fun was and interesting companies presenting visions. Now it's just dead. All the people are in Hall Two, where you have companies such as Microsoft and IBM. The power has shifted back to the big companies," says Nico Waesche, vice-president at Global Retail Partners, a venture capital company. Even with the big companies, there were bizarre juxtapositions of language at CeBIT, with gloomy comments about the slowdown mingling with hope about new technologies. Last week, Motorola, the US communications equipment and semiconductor group, said its job cuts would rise to 22,000.

The news came just as Motorola executives at CeBIT were making confident noises about increasing market share in handsets with its new range of handsets designed for General Packet Radio Services (GPRS) networks. The technology is expected to improve the experience of mobile Internet by allowing phones to be always online.

That sense of confidence in the potential of GPRS was one of the strongest themes at the show. Luminous pink signs on the Motorola stand heralded the arrival of the new technology. "GPRS is here now," the signs declared.

Steve Lalla, a Motorola executive, said: "The market is taking off right now. There are more than 13 operators in Europe with GPRS networks. We have already shipped more than 150,000 handsets and have orders from a major European customer for 500,000 more in the second quarter."

Nokia, the leading handset manufacturer, expected volumes of GPRS phones to build. "This year has been the year of GPRS at CeBIT. The GPRS market should start in the second half of the year," says Pekka Isosomppi, communications manager at Nokia.

Telecoms executives saw the launch of GPRS as crucial in generating excitement about sending data to mobile phones and in raising revenue per user. In Ireland, GPRS is expected to be launched by the end of the summer. It will be aimed at corporate users initially, with a wider reach earmarked for later this year.

The arrival of a mass market for GPRS devices has also been seen as crucial to driving the need for sophisticated operating systems, such as the EPOC operating system produced by Symbian, to be built into phones. However, there were ominous signs that these hopes will not be realised soon. None of the GPRS phones shown at CeBIT included the EPOC operating system. "For our current products, we don't need the Symbian operating system," said a Motorola executive. "This is a cost-competitive business. We will not embed any more cost in the product than is needed." Nokia - which like Motorola and Psion is a shareholder in Symbian - also suggested it was more likely to use its own, in-house software for its high-volume phones and only use EPOC for "high-end phones and communicators". Those comments could add to pressure on Symbian. Last year, analysts valued Symbian - which has announced plans to float - at up to £5 billion sterling (€8.02 billion) on the assumption EPOC could secure the dominance in wireless devices that Microsoft has in PCs.

The sense of hope about the technology sector was not limited to GPRS. Alternative wireless technologies, such as wireless local area networks, which offer users Internet connections at high speeds without wires, also got attention.

"Today the growth rate for these products is about 200 per cent," said Anne de Roos, product manager at Lucent. "Compared to 3G networks, it is a solution that exists now."

But for all the pragmatic talk about these technologies, the best escapism from the gloom came with the conceptual products.

A star turn was Motorola's "life recorder," which straps over a body like a bra and can send live audio and video footage via 3G networks back to a home PC. Interest was so strong that the two chief designers - dressed in modish black with a yellow flower - were hoarse from explaining it. Whether that concept can be converted into commercial products, however, will await another CeBIT.