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Perhaps Starbucks should concentrate more on its WiFi Internet, less on coffee froth?

Rumours of free Internet through McDonalds have largely been ignored, as Starbucks shares have fallen 50% in the past year. Its domestic business in the US has slowed, and the company has re-hired former CEO Howard Schulz, in the face of competition from McDonalds.

But though the threat to Starbucks from McDonalds is widely analysed in the world's mainstream media today as being based on coffee, not WiFi, in fact, wireless Internet may be a more important factor than the normal City and Wall Street analysts realise, and one straw in the wind could be the new "business version" of the Sony Mylo.

According to Information Week, the new Internet toy will form a major part of the hamburger chain's strategy to extend its rivalry with Starbucks:

McDonald's promised last week to outfit 14,000 of its locations with upscale coffee bars accompanied by expanded WiFi service as the fast-food chain inches closer to offering the wireless technology free of charge. Currently, McDonald's provides WiFi service to 15,000 of its 30,000 U.S. and international locations. The service is available most often through a credit card purchase or through Internet service provider Wayport.

"If I am going to spend five pounds on a coffee while having a business discussion, I will expect some incentive," remarked one high-power consultant this week. "If I can get free WiFi in Costa Coffee, but it costs real money in Starbucks, it's an easy choice."

Should McDonalds make the Internet free, its lower-price coffee will push several business users into accepting the normal "noisy kids" demographic, the market suspects.

Coffee, of course, is the prime focus of a coffee shop, and Starbucks is no doubt right to prioritise failures in its image, says the Guardian's  Andrew Clark:

Schultz recently warned in a leaked internal memo that the brand's charm was in danger of diminishing as it became a mainstream "commodity". He said the sense of theatre had evaporated, thanks to automatic espresso machines, and he complained some stores even no longer had an aroma of fresh ground coffee due to vacuum-sealed packaging.

And he added that "Starbucks had its nose put out of joint last year when Consumer Reports, a US magazine, gave McDonald's coffee a higher taste rating."

But as ambitious "metropolitan Internet" WiFi projects struggle to get traction in big cities, the meeting place which gains acceptance as "the place to get online during an informal conference" could well outstrip the chain which merely puts pretty chocolate patterns into the froth.

And City analysts should perhaps ask Schulz "Exactly what does your deal with T-Mobile do to your bottom line?" and even more poignantly, "If you had to find another provider to replace T-Mobile, how long would it take to replace that infrastructure?"

Anyway, in the UK, as the Hunkymouse reports: "I prefer Ben's Cookies - free WiFi, free coffee topups and nice cakey/biscuit things too..."