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D-Link Aims High(er)

Wireless LAN kit manufacturer D-Link Systems Inc. has told Unstrung it plans to make inroads into the SME (Small and Medium Enterprise) markets following a history of focusing on SOHO (Small Office, Home Office) users.

What's that all mean (WTAM)? The move marks an ambitious shift away from the fast growing, but less profitable, SOHO installation market, where D-Link has enjoyed recent success with the sale of its Wireless LAN access points, PCI cards, and bridges (see 802.11 WLAN Shipments Double). According to recent statistics from the Synergy Research Group Inc., D-Link held a 16 percent market share in 2002 (up from 11.6 percent the previous year), putting it in third position behind rivals Linksys Group Inc. and Buffalo Technology (USA) Inc.

“The SOHO market has always been our core focus, but it won’t stay that way,” reveals the company’s Mats Brager, VP for Northern Europe. “We want to move upwards in the value chain. Our next step is the SME market, and long-term we hope to move into the larger enterprise area.”

It’s a bold strategy for D-Link, and analysts warn the company will have its work cut out should it wish to compete amongst the likes of Cisco Systems Inc. (Nasdaq: CSCO), Symbol Technologies Inc. (NYSE: SBL), and Proxim Corp. (Nasdaq: PROX), which between them already dominate more than half of the wireless LAN enterprise equipment market.

“They tend to be stronger in the lower end of the market,” says Michael Wall, wireless research analyst at Frost & Sullivan. “They seem to be very good at producing low-cost equipment, but I don’t think they’ll ever be a major player in the lucrative enterprise-class end of the market.”

Despite the challenges, Brager is convinced that demand exists for its 802.11b kit in the SME arena and hopes to see results by the end of this year or early 2004. “There is room for us to grow, and we will be adding value to these markets."

Brager adds that such value will be aided by the company’s intention to market itself in the future as a more unified business. “We need to share our resources to ensure we provide proper levels of service to both the end user and resellers,” admits the VP. “The company needs to add more structure in order to continue to grow.”

— Justin Springham, Senior Editor, Europe, Unstrung

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