The wireless router market is the subject of a lot of hype at the moment, with a bunch of established players and eager startups all vying to supply the infrastructure that will power new wireless data services.

But how much is the market for wireless routers actually worth? In "Wireless Routers: A Market Waiting to Happen?", the latest edition of Unstrung's monthly paid research service, the Wireless Oracle, our research team takes the lid off this murky topic and has a poke around.

Wireless routers, also known as GPRS Gateway Support Nodes (GGSNs) and Packet Data Serving Nodes (PDSN), are the primary interface between a carrier’s radio and packet core networks. In their next-generation guises, these wireless routers comprise a new class of equipment that adds sophisticated service creation, billing, and IP traffic management capabilities to this strategic point in the network.

"Wireless routers will be key enablers of the all-IP mobile network, if and when it becomes a reality," says Gabriel Brown, Unstrung's Research Analyst. However, he says companies like Cisco Systems Inc. (Nasdaq: CSCO), CommWorks, and Megisto Systems -- along with the many others profiled in this report -- face a long, hard road before this will happen.

The Wireless Oracle -- using data culled from Yankee Group, Deutsche Banc Alex Brown LLC, and Tahoe Networks -- says that the potential worldwide market for wireless routers will be worth $2.5 billion by 2005 and $4 billion by 2006, constituting 1.5 percent of total infrastructure spending in 2002-2004 and 2 percent in 2005-2006.

"The key point appears to be that the value of wireless routers, in terms of the network functionality and services that they enable, is more significant than their contribution to the total cost of building a wireless network," says Brown.

The key thing that will drive carrier requirements for wireless routers is their need to deliver more-sophisticated data services. At the moment, says one industry insider quoted in the report, many operational GPRS networks have deployed just two GGSNs, while some have deployed only a single GGSN. Only the need to deliver more bits to more subscribers will drive that figure up.

"In fact, demand for wireless router products is not really expected to ramp up until 2005-2006, when the revenue generated by wireless data subscribers is expected to become far more significant to wireless network operators," says Brown. "Indeed, the overall proportion of capital expenditure allocated to 'mobile' IP infrastructure is widely expected to expand as the data services market develops and the buildout of the radio access network slows."— Dan Jones, Senior Editor, Unstrung
http://www.unstrung.comThe full report, "Wireless Routers: A Market Waiting to Happen?", costs $400. An annual subscription to the Wireless Oracle is ordinarily $1,250, but is currently available at the special introductory price of $899. For more information, including subscription information and research examples, go to Wireless Oracle.Editor's Note: Light Reading is not affiliated with Oracle Corporation.