Why are there no cool local applications for dual-mode WiFi phones?

I am becoming slowly more disillusioned with the notion of WiFi on mobile phones.

For the last 4 years, I have been expecting the addition of WiFi to drive innovation in handsets, and lead to a variety of interesting applications and business models. But to date, I've only really seen 3 use cases:

• Connection to operator telephony+SMS via WiFi, using UMA, or sometimes SIP.
• Connection to non-operator telephony based on VoIP (Skype, Truphone, enterprise PBX etc)
• Connection to the Internet to share a broadband connection for web & email

I suppose 'indoor coverage' is a fourth, and maybe (from the operator point of view) macrocellular offload onto the customer's own broadband connection. But I'd argue that those are justifications rather than actual applications, and in any case overlap strongly with enabling the other three.

I've seen almost nothing about using the WiFi to connect to local computing or electronics resources. Nobody uses a WiFi phone instead of a microphone at conferences. Nobody shares music or video between phone and PC hard drive via WLAN. Most people still sync email & PIM via USB or Bluetooth. Nobody uses their handset as an Xbox or PlayStation controller. Nobody interacts with a street kiosk with a dualmode phone. Nobody orders their own food in a restaurant.

The exception here is in the enterprise, where phones will now hook into the PBX for a variety of purposes beyond voice - and WiFi (albeit usually on single-mode devices) is also used for a variety of specific corporate data applications like stock control or point-of-sale connectivity. But I don't see Nokia N95's or 'handsets' as such, being used in warehouses -although maybe the Symbol MC series count as dualmode phones.

But in the consumer market, WiFi phones are just about telephony and Internet. Apple has helped a bit with the iPhone, so maybe we'll get some innovation there. And in theory, the use of universal plug-n-play (UPnP) on some Nokia devices should facilitate better interworking with consumer electronics.

I suspect there are a few problems that have inhibited the use of cool, local, WiFi-enabled apps on smartphones:

• Relatively low numbers of WiFi handsets - and often consumers don't know, don't care or can't even switch it on when they do have it. I'm thinking here about people who got an N95 subsidised down to zero, solely choosing it on the basis of a 5MP camera.
• Relatively low numbers of WiFi homes (and offices) until recently. Plus lots of general horribleness around configuration, security settings etc etc. As an aside, this has also inhibited the use of WiFi in other non-PC devices like cameras.
• Passive or active discouragement of WiFi by operators, especially in operator-centric, non-Nokia strongholds like the US, Japan & Korea.
• Lack of willingness by handset makers to rewrite all their embedded applications to exploit WiFi. "Oh no, do we really have to rewrite the music player app to look for a PC hard drive when the phone's in WiFi range?"
• Usual problem of fragmentation of operating systems & customisations, that makes creating any sort of 3rd-party software a pain. Add this to the fragmentation of home WiFi setups and you multiply the complexity.
• Generally poor support for developers to write bearer-aware applications - ie apps that behave differently (or are only accessible) when the phone is in WiFi mode. This is slowly changing, with Symbian's new Freeway architecture, for example. Long way to go, though.
• Potential for 'fights' between operator use of the WiFi, and local applications. What's more important & gets priority - an operator phone call, or a file transfer to the company's Oracle database over the WLAN? It's very difficult to balance the rights and privileges of 'private' WiFi use against 'operator' WiFi, especially if there are multiple SSIDs set up (eg on some home gateways, UMA services have their own WiFi SSID).
• Generally low awareness of, and low comfort with, WiFi in peer-to-peer mode.

Obviously telephony (operators' or someone else's) and fast web/email access are hugely important. Offloading that phone/Internet traffic from the operator's network is economically attractive for some operators. But I think for WiFi to really get beyond perhaps 10% of handsets, there has to be more than that. With the advent of HSPA/EVDO with flatrate data, various improvements to indoor coverage (eg femtos), there's nothing compelling or unique that you need WiFi for in a phone, except in the enterprise. You can do VoIP over the 3G network. You can browse over it. You could even run UMA over 3G if you really wanted.

For dualmode WiFi phones for consumers to become massmarket, there need to be local applications, connecting to home PCs or consumer electronics, or maybe stuff besides Internet connection at hotspots. And these will mostly need to be non-billable, non-operator applications too.

Put simply - stop calling it WiFi, and start calling it by its techier name, Wireless LAN. Then forget the 'W' too. We need some LAN (local area network) applications for dualmode phones, not just wireless ones.

Over to you, Apple, Nokia, Microsoft & co.