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802.11 Preps for Shakeout

Buckle up tight, folks. We’re in for a bumpy ride.

Recent vendor dropouts in the wireless LAN equipment sector are just the beginning of a radical market shakeout, according to the results of Unstrung’s October poll: 802.11: Ready for a Shakeout?.

The past few weeks has seen speculation grow over the health of startups AirFlow Networks Inc., Bermai Inc. and Legra, whilst incumbent chipset vendor Agere Systems Inc. (NYSE: AGR.A) has pulled the plug on development of 802.11 products for the PC market. (See AirFlown?, Bermai Butts Out, Exit Legra, Stage Right, and Agere Quits 802.11.)

Worse still, the prognosis is that the market’s condition looks set to deteriorate.

On no!

Oh yes, it's true. At least according to Unstrung's utterly unscientific, knee jerk, scaremongering poll, in which 79 percent of 129 respondents believe that the 802.11 equipment market will “definitely” undergo a serious shakeout, “an inevitable result of too many competitors in a crowded space.”

A mere 13 percent have faith that the market “has room for further growth.” (VCs, no doubt.)

But wait. It gets worse. Startup vendors are flagged as serious future casualties. Only 1 percent of readers believe the majority of today’s 802.11 startups will “become successful independent businesses.”

In contrast, 44 percent expect the bulk of newcomers to “slowly wither and die.” A fifth (20 percent) warn that startups will be forced into partnering with rival players just to stay alive, and a further 35 percent claim that the mass of today’s startups will “get acquired by larger incumbents.”

As a result, a solid majority (60 percent) of respondents forecast that this time next year the 802.11 equipment sector will see “incumbent network vendors ruling the roost.”

On the subject of which particular 802.11 equipment sector will suffer the greatest damage, the wireless LAN switch market is feared to be most at risk (37 percent of the vote). Hotspot service providers (26 percent) and wireless LAN chipset vendors (23 percent) are also tipped by many to struggle.

Unstrung’s latest poll probes the 802.11 hotspot market in more detail. Have your say here: 802.11 Hotspots: A Burst Bubble?

— Justin Springham, Senior Editor, Europe, Unstrung

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