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Infonetics: WLAN Switches Sizzle

Light Reading
LR Mobile News Analysis
Light Reading
5/24/2004

The enterprise wireless LAN switch sector has seen "dramatic" growth between January and March of this year, with revenues up 121 percent on the previous quarter, according to a report from Infonetics Research Inc.

Richard Webb, directing analyst at Infonetics and lead author of the report, notes that, for many vendors shipping this new class of centralized wireless LAN infrastructure, this was only "the second quarter of real revenue." But Infonetics is predicting that the market should see healthy "double digit" growth throughout 2004 and right on into 2007.

"We see it all curving up in the right direction," says Webb.

In contrast, the overall market for wireless LAN hardware (consumer and enterprise) is experiencing slower revenue growth because of increased competition on prices. Infonetics says the entire market was worth $696.4 million in the first quarter of 2004, up 2 percent from the last quarter of 2003, and predicts it will grow 2 percent to $713.6 million by the first quarter of 2005.

Webb says that Symbol Technologies Inc. (NYSE: SBL) is still leading the 802.11 switch pack. "By virture of the fact that they had a product out on the market first... and they're selling strongly into their existing customer base." Webb is much more cagey about the sales figures for the startups in the market. Most of them, he says, only agreed to hand over the data on the condition that he didn't reveal sales figures for individual firms.

But Webb says that some startups -- naming no names -- are getting "strong traction" in the marketplace.

He thinks that Cisco Systems Inc.'s (Nasdaq: CSCO) recent SWAN (Structured Wireless Aware Networks, acronym fans!) dive into the WiFi switch market has helped to validate the concept of centralized control of wireless LAN networks, and may even push some more sales to the startups (see Cisco Switches On).

"It's not just a bunch of crazy, eccentric startups with a weird marketing message any more," notes Webb. [Ed. note: he clearly hasn't met some of them!]

— Dan Jones, Site Editor, Unstrung

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