Addition to Starbucks' menu: Wi-Fi
Seattle Times technology reporter
The service allows customers with laptops and handheld computers equipped with Wi-Fi cards to wirelessly access the Internet at speeds up to 50 times faster than a dial-up connection.
"I think that this is a rare opportunity to link transformational technology with the lifestyle of Starbucks customers," said Howard Schultz, Starbucks' chairman and chief global strategist. "We believe very strongly that this is going to enhance the experience customers have in our store and add incremental traffic."
The Wi-Fi networks — also called 802.11b and wireless local area networks (WLAN) — have been operating in 500 Starbucks stores for the past 12 months, originally built by MobileStar, a Richardson, Texas, company.
The company went bankrupt after spending too much money to build networks in Starbucks stores and airports and failing to attract enough customers to the service. Last November, the Bellevue subsidiary of Deutsche Telekom VoiceStream picked up the assets of MobileStar.
Observers attributed MobileStar's failure to the limited marketing Starbucks did inside its stores, where a stack of brochures behind the counter was the only sign that the networks existed.
This time around, Starbucks has trained its baristas about the service and it will place signs on the front doors at hotspot stores. It also plans to run a national newspaper advertising campaign to promote the service.
Starbucks and VoiceStream plan to expand the network to 800 more stores by the end of the year, and have started a pilot at stores in London and Berlin.
The service comes packaged several ways, and an unlimited-use account in one city costs $29.99 a month. Hewlett-Packard will provide free software downloadable at Starbucks stores that senses available wireless networks. In Seattle, 218 Starbucks stores currently have the service.
In the past year, Wi-Fi hotspot technology has emerged as a potential competitor to the wireless carriers, who are upgrading their wireless voice networks to transfer data at speeds comparable to a dial-up modem.
Unlike the wireless carriers' networks, Wi-Fi technology uses unlicensed airwaves and the equipment costs are much lower. VoiceStream, which is changing its name to T-Mobile, remains the only wireless carrier so far to publicly embrace the technology with its acquisition of MobileStar.
"I believe that every wireless carrier is puzzling out how to play with Wi-Fi," said Mark Anderson, publisher of the technology e-mail newsletter Strategic News Service. "It's the biggest problem they've got. The smart ones will do what VoiceStream T-Mobile is doing. They'll play."
Sharon Pian Chan: 206-464-2958 or email@example.com.