Wireless LAN didn't grow as fast as other "advanced technologies" in Cisco Systems Inc.'s (Nasdaq: CSCO) lucky grab bag during its second quarter, according to an analyst note from Merrill Lynch & Co. Inc.

The note adds weight to suggestions that Cisco plotted its $450 million move on wireless LAN switch startup Airespace Inc. to head off any future weakness in its standalone access point business at the pass (see Cisco Spirals AP Market and Cisco Buys Airespace).

In the note, Merrill analyst Tal Liani notes that such technologies as storage, wireless, and VOIP now represent 19 percent of Cisco's revenues, only 3 percent less than its router sales (see Cisco Holds Steady in Q2): "Cisco’s advanced technologies grew nearly $200 million sequentially, which is more than twice the best sequential growth achieved organically in any previous quarter. The growth was well balanced with all but wireless technologies achieving robust double digit growth."

Cisco is still a comfortable number one in the enterprise wireless LAN market, but the prices of its Aironet standalone access point products are under pressure. The latest Unstrung Insider states that Cisco’s new 1230 AP product, priced at $999, is available for a street price of $650; and its 1130 AP, priced at $699, is available for $450, a 35 percent discount off list price.

Liani reckons that once Cisco integrates the mid-range Airespace product line into its portfolio the firm should once again see stronger sales: "We believe that wireless technologies will grow rapidly once Cisco completes its Airespace acquisition."

— Dan Jones, Site Editor, Unstrung