Airgo Networks unveiled on Monday an 802.11 chip design that will more than double the data rates offered on most of today's wireless LAN networks (see Airgo Samples WLAN Chipset).

The question on some analysts' lips: Will potential customers pay a premium to be a wireless LAN speed demon? (Ergo: Will these chips sell?)

Airgo's AGN100 chipset uses a multimode design that supports the 802.11b (11-Mbit/s over 2.4GHz), a (54-Mbit/s over 5GHz), and g (54-Mbit/s over 2.4 Mbit/s) standards. However, using multiple-input/multiple-output (MIMO) smart antenna technology, Airgo claims that its design can crank up the data transfer speeds on wireless LAN networks to 108 Mbit/s at a range of up to 300 feet.

MIMO "smart antenna" technology uses multiple antennas on the client device and backend to increase the speed and capacity of a wireless network. Greg Raleigh, the startup's CEO, says that Airgo's "secret sauce" [ed. note: how very 80s -- is the chip "on steroids" too?] is the way the company has managed to reduce the size and cost of the three antennas that can be used on its fully loaded chipset. Still, customers will likely pay a premium of $20 or more over standard multimode chipsets when the company starts shipping product in the fall, he says.

Raleigh says Airgo aims to sell its chip into the consumer market, particularly targeting high-rate multimedia systems, as well as the enterprise. He says the company is already working with partners on 802.11 products.

However, despite lauding the technology behind Airgo's chipset, analysts wonder if it will find buyers in the price-sensitive world of 802.11 silicon.

"Betamax is still better than VHS but so what?" chuckles Will Strauss, analyst with Forward Concepts Co. "They didn't pay for Betamax, did they?"

Strauss expects that the chipset may find a "niche market" in the enterprise.

Ken Furer, analyst at IDC wonders whether enterprise customers are really ready for the wholesale access-point and client upgrades that would be required to take advantage of the maximum transfer speeds offered by the Airgo technology. (Products featuring the chip would be able to talk to 802.11 devices using regular ol' chips from other vendors, but not at hyper speed).

Furer calls the Airgo silicon a "pre-n" technology, referring to the high-speed upgrade to the 802.11 standard that the Institute of Electrical and Electronics Engineers Inc. (IEEE) is working on (see IEEE Plots Speedier WLAN). "The market is just not ready to deal with pre-n technology," he says. "Not with the move to dualmode [chipsets] and 802.11g that's happening."

Airgo has been working in stealth on the chipset design since its founding in 2000, according to Raleigh (see Switch Tiff Heats Up ). Previously, Raleigh was at Clarity Networks, a wireless startup he sold for $153 million to Cisco Systems Inc. (Nasdaq: CSCO) in 1998. Raleigh first started working on MIMO techniques while he was a student at Stanford University.

The startup's rivals in the WLAN silicon market include Atheros Communications Inc., Broadcom Corp. (Nasdaq: BRCM), Intel Corp. (Nasdaq: INTC), and Texas Instruments Inc. (NYSE: TXN).

— Dan Jones, Senior Editor, Unstrung

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