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Report says WLAN ICs to fare well
Posted: 06-Oct-2004 [Source: In-Stat/MDR]

[Research group expects consumer electronics and Wi-FI IP telephony to create significant market opportunities for Wi-Fi and WLAN ICs.]

Scottsdale, Ariz. -- As businesses and consumers have sought to wirelessly network PCs and other peripherals without the cost and complexity of installing and managing a cable infrastructure, the Wireless Local Area Network (WLAN) IC market has grown rapidly over the past four years, reports In-Stat/MDR. The high-tech market research firm believes that through 2008, Consumer Electronics (CE) and Wi-Fi IP telephony will both represent significant market opportunities for Wi-Fi, and, by extension, WLAN ICs. A range of CE devices, including HDTVs, PVRs, DVD players, media adapters, music players, digital cameras, and game consoles, will benefit from Wi-Fi connectivity.

"The adoption of Wi-Fi in home networking is driven by the increasing adoption of broadband Internet access, the desire to share these broadband connections among multiple PCs, the digitalization and disintermediation of content, and the resulting desire to share digital content among multiple CE devices in the same manner that content from the Internet is shared among multiple PCs in the home," said Sam Lucero, an industry analyst with In-Stat/MDR. "Likewise, we see the beginnings in 2004 of the use of Wi-Fi in mobile handsets, both Wi-Fi cordless phones and Wi-Fi cellular handsets. We believe that the integration of Wi-Fi and cellular technology will prove especially attractive to both business customers and consumers, and that this market segment represents one of the most significant market opportunities for WLAN ICs." In-Stat/MDR finds several drivers for Wi-Fi/cellular integration: customers benefit from cheaper and higher-quality calls while on the WLAN infrastructure while still being able to place regular cellular calls when away from Wi-Fi access, customers benefit from being able to consolidate multiple devices down to one handset, and cellular providers hope to use Wi-Fi cellular handsets to cement customer relationships and reduce churn in their subscriber bases.

In-Stat/MDR has also found that:

Revenue from WLAN ICs sold into CE and IP telephony applications together will account for roughly half of the $2.1 billion in revenue expected to be earned in 2008.

Recently, this market has consolidated, with many former vendors now either out of business or acquired by larger companies, in the face of stiff price competition. Surprisingly, Taiwanese vendors have not yet had as significant an impact as many thought they would.

At present, a handful of vendors, mostly located in the United States, dominate the market. These include Agere, Atheros, Broadcom, Conexant, Intel, Marvell, and Texas Instruments.

Work on new standards to improve rate, reach and functionality continue. The 802.11i security standard was ratified in June 2004, and ratification of the 802.11e QoS standard, for multimedia applications, is expected later in 2004. A standard to improve Wi-Fi throughput to a minimum of 100 Mbps is currently being developed and is expected to be ratified sometime in 2006 or 2007, although pre-standard equipment is already starting to appear on the market.

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