Boeing Boeing …. Gone

Is it a case of don’t trust the early adopters? Boeing’s Connexion “broadband in the sky” service received rave reviews from most of the early adopters who wrote long paeans about the service, and how they could Skype and work in the sky.

The mass market thought otherwise. Boeing today decided to shut down the service and is taking a $320 million charge, as it writes down the assets and pays termination fees to the customers. All Nippon Airlines, Japan Airlines, SAS, Singapore Airlines and Lufthansa are three airlines with live Connexions. This should not come as a surprise, since the company has been shopping the service for a while. The decision is also bad news for Colubris Networks, one of the key equipment providers to Boeing.

“Over the last six years, we have invested substantial time, resources and technology in Connexion by Boeing,” said Boeing Chairman, President and CEO Jim McNerney. “Regrettably, the market for this service has not materialized as had been expected. We believe this decision best balances the long-term interests of all parties with a stake in Connexion by Boeing.”

One of the biggest problems Boeing faced was lack of traction in the key US market, where many routinely travel with laptops and want to stay connected. The service, which received internet signals from Satellites and distributed them via WiFi is also facing competition from other technologies. JetBlue, for instance has won special licenses that all allow it to deploy wireless broadband on its jets and offer communication services. It remains to be seen what happens to that service.