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Airespace, Aruba IPO Hopefuls

Heavy Reading -- the research arm of Unstrung's parent publication, Light Reading -- has identified Airespace Inc. and Aruba Wireless Networks as the two 802.11 wireless LAN switch startups with the best chance of making it and going public in the next 12 to 24 months.

The new report -- Telecom Recovery Investment Opportunities -- examines the prospects for renewed IPO and acquisition activity across a broad swath of startups in the networking industry. The author, Scott Clavenna, chief analyst at Heavy Reading, also names that other wireless LAN switch contender, Trapeze Networks Inc., as a potential acquisition target (see Trapeze's New Swinger).

The report argues that the IPO and M&A prospects for the next couple of years are brighter than they have been for some time.

As equipment buyers once more start to spend money in earnest, "traditional incumbent vendors may find themselves vulnerable to more innovative suppliers," Clavenna writes. In turn, established vendors will look to fill gaps in their product lines by acquiring fresh talent from the startup pool.

As well as Airespace, Aruba, and Trapeze, the report also profiles wireless LAN switch contenders AirFlow Networks, Chantry Networks Inc., Legra Systems Inc., Meru Networks Inc., and Vivato Inc.

"Airespace and Aruba are the two switch startups that look to have gained early traction in this emerging market, and both are already talking about their IPO prospects," Clavenna tells Unstrung (see Switch Startups Mull IPOs).

Meanwhile Trapeze -- Clavenna's acquisition pick of the bunch -- "is scoring points for ease of use, especially among enterprise customers."

That's not to say that all is rosy in wireless LAN switch land. Clavenna argues that there are too many startups in this sector, especially given the size of the market, which Unstrung Insider estimates will be worth $600 million by 2006.

Therefore, he argues, not all of these startups will make it out of the market alive.

"It bears noting that because this market sector is so new, there is no established precedent for exits," Clavenna bearly notes. "Given the nascence of this market, startups may be just as likely to go belly-up as they are to cash in via IPO or acquisition." Nothing like leaving them laughing, eh?

— Dan Jones, Site Editor, Unstrung

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