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Broadcom's Got a Switch Killer

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LR Mobile News Analysis
Light Reading
1/26/2005

A new chip from Broadcom Corp. (Nasdaq: BRCM) could cause a major shift in the enterprise wireless LAN industry, enabling vendors to build much more wireless functionality into wired networking products.

Analysts say that products of this kind will take the focus off wireless LAN switching software and force both established and startup vendors to further develop management software for 802.11 networks.

Broadcom introduced the first of its StrataXGS III line of Ethernet switch chips on Monday, pushing them as a first step toward absorbing wireless LAN switch hardware into an Ethernet switch (see Broadcom Integrates WLAN).

The idea that wireless LAN switching capabilities could be handled at the wired switch has been a popular theme among established networking vendors competing with startups in the 802.11 market. But there has not been much evidence that anything like that was actually happening, until now.

Craig Mathias, principal at analyst firm Farpoint Group, certainly sees the integrated chip as a major turning point for the industry. "Look for the integrated model to replace pure wireless switches entirely over time," he says. "Eventually there will be no boundaries between wireless LANs and the rest of the network."

Initially, Mathias expects that it will mean "dramatically lower [wireless] switch... hardware prices" and "a real opportunity for those in the third-party management software business today."

For the moment, this means companies like Roving Planet Inc. and Wavelink Corp., although many hardware vendors have already started to focus more on the software capabilities of their products as well.

Bob Wheeler, senior analyst at The Linley Group, group agrees that the chip will help shift the focus of the market towards software, although he doubts there will be huge cost benefits.

"It will make the hardware cheaper but may not make the overall design that much easier, as there is still a lot of software involved," says Wheeler. "So I think this merely shifts the value of WLAN switching more towards software." — Dan Jones, Site Editor, Unstrung

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