No Steep Curve For WiFi

Wireless LAN equipment market will grow in terms of units shipped, says Frost & Sullivan, but revenues will fall

November 18, 2002

2 Min Read

SAN JOSE, CA. -- In an increasingly information- driven world, wireless local area networks (WLANs) empower mobile computer users to access data without the constraints of place and time. New analysis from Frost & Sullivan ( ), World Wireless Local Area Network Markets, reveals that hardware revenues in this industry totaled $1,546.6 million in 2002 and are projected to generate $1,455.8 million by 2009. The slight decrease in revenues can be attributed to an expected decline in unit prices because of strong vendor competition. However, unit shipments will continue to increase significantly due to standardization, interoperability, and growing adoption rates. "The WLAN market has continued to be one of the brightest spots in the computing industry over the past couple years," says Frost & Sullivan Industry Analyst Wai Sing Lee. The growing popularity of broadband Internet connectivity, which allows homes with multiple personal computers to share Internet access, boosts demand for WLAN technology in the small office/home office markets. Embedded radio chipsets are fast becoming a common feature in devices such as laptops and personal digital assistants. This trend is expected to negatively impact the market for WLAN adapters, forcing vendors to diversify into other product lines. In a market where several competing standards exist, vendors have to decide which standard their products will support in future. This gives rise to a situation of potential confusion, in which dual-mode products are expected to thrive. Currently, the prevailing standard, 802.11b is facing some competition from the introduction of 802.11a and possible replacement by 802.11g later. Another trend that continues to plague the industry is the commodification of products. Vendors must strive to differentiate their offerings from one another, a difficult task in a market that owes its success to its homogeneity. "The challenge is how to differentiate a WLAN product enough to justify a higher price but in such a way as to not ruin an industry built on standards," says Lee. Frost & Sullivan

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