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Pulls plug on PC market, focusing instead on VOWLAN [UPDATED 10/13 9:53 PM]

Agere Quits 802.11

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LR Mobile News Analysis
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10/13/2004
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Chipset vendor Agere Systems Inc. (NYSE: AGR.A) is to pull the plug on the future development of 802.11 products for the PC market and turn its attention to voice-over-WLAN (VOWLAN) technology, Unstrung can reveal.

On Monday a company spokesman told Unstrung it plans to "exit the WLAN market moving forward," stating that "we don't plan to invest any more in the development of new 802.11x products."

Three days on, and the company is refining its story.

"Agere is focusing its efforts in Wi-Fi on the areas where we see greatest opportunity for growth, which are wireless VOIP and the integration of Wi-Fi and cellular," writes senior EMEA communications manager Luca Balbo in an email note to Unstrung today. "The unit volumes in the mobile phone market are nearly three times the volumes in the PC segment, where there are extreme price pressures and increasing commoditization.

"We do not expect to continue developing future stand-alone Wi-Fi solutions, including chips for 802.11n. We will continue to support our existing customers with our current multimode 802.11a/b/g and 802.11b solutions. Our future Wi-Fi product development will be driven by the needs of our mobility roadmap."

The company says it expects to announce "a number of design wins for wireless VOIP phones with major customers in the coming weeks."

Late last month Agere announced it is to cut 500 jobs and put a deadline on another 600 (see Agere Wields Jobs Axe). It has also been touted as a potential acquisition target of rival chipmaker Broadcom Corp. (Nasdaq: BRCM). (See Rumor: Is Broadcom Buying Agere?.)

Agere's move is the latest shockwave to hit the wireless LAN industry, following a glut of recent vendor fallouts (see AirFlown?, Exit Legra, Stage Right, and Bermai Butts Out).

— Justin Springham, Senior Editor, Europe, Unstrung

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