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Wi-Fi IC Shipments Set To Top Expectations, According To ABI Study
Posted: 15-Jan-2003 [Source: Allied Business Intelligence]

[WiFi chipset shipments to reach 23-25 million units this year, according to new market study, with continued growth to 147.5 million units by 2007.]

Oyster Bay, NY -- Driven by strong growth in the SOHO/retail market segment and broader global demand for 802.11x based wireless local area network (WLAN) solutions, shipments of chipsets are set to hit 23 to 25 million units this year, up from 7.9 million in 2001. This is considerably above initial expectations for 14-15 million chipsets, and it points towards an acceleration in catalysts driving Wi-Fi adoption.

Taking into account rapid price declines of ICs, a growing confidence in new addressable markets and the immense interest in 802.11 technology Allied Business Intelligence's (ABI) new forecasts indicate that between 2002 and 2007 Wi-Fi chipset shipments are set to grow at a CAGR of 43%. Hence by 2007 shipments will reach 147.5 million chipsets, with revenues of $1.13 billion.

"There is a very elastic relationship between pricing and demand in the wireless LAN market, and every step down in prices brings the industry closer to unlocking new opportunities and applications," said John Chang, ABI Senior Analyst. "There is fierce competitive innovation in this market and it is critical for market participants to commit significant resources if they hope to compete successfully against the likes of Intersil and Intel, whose Calexico dual-band 802.11a/b offering will ship in 2003."

Findings from the ABI report titled Wi-Fi Integrated Circuits: Industry Dynamics, Market Segmentation and Vendor Analysis for 802.11a/b/g" include:

* By 2004 revenue from dual-band chipsets will exceed those from 802.11g and 802.11b.

* The market entry of Taiwanese IC players in 2003 will further pressure 802.11b pricing.

* The 802.11b market will have legs beyond 2004, but chipsets will increasingly be targeted for embedded implementations particularly in very battery-constrained devices such as PDAs and eventually mobile handsets.

* 802.11g will have a significant impact in the SOHO/retail market and will comprise 18% of IC shipments in 2003, much of it backend-loaded.

* The pattern of continuous price declines will quickly extend beyond the existing 802.11b chip market into 802.11g and dual-band segments.

* CMOS and Zero-IF architectures will be important in enabling lower cost architectures, including a potential single-chip solution.

The key focus of the ABI study is to provide extensive market segmentation based on protocol, application market, geographic region and client form factors. This is complemented by vendor market share analyses for 2001 and 2002 by functional blocks (baseband, MAC, RF and power amplifier). The study also examines current and future IC offerings from both large semiconductor companies as well as start-up developers, with insights into their competitive positioning. This is complemented by a thorough identification and analysis of current industry dynamics and IC trends.

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