U.S. Bancorp Piper Jaffray Sees Broadband Wireless
Local Area Networks Reaching An Inflection Point

    PORTLAND, Maine, Aug. 7, 2002 - In recent years, 802.11 technologies, also known as Wi-Fi, have developed considerably. In his new in-depth research report entitled The Wireless LAN Report, 802.11 - Disruptive Technology, U.S. Bancorp Piper Jaffray Senior Wireless Equipment Analyst Samuel May asserts that with these developments, service providers are seriously questioning their investments in third-generation (3G) mobile data networks, and are considering the alternative/threat that wireless local area network (wLAN) hot spots pose to attracting paying data users. May believes the industry is currently reaching a major inflection point for widespread adoption of 802.11.

    "A fast rise in hot spots, networks serving specific vertical markets ranging from the consumer to the corporate side of the business, represents an inflection point, the second phase of wLAN adoption," said May.

    In addition, consistent with the thesis outlined in his Global 3G Report (published April 2002), May believes widespread adoption of 3G mobile data networks will be significantly delayed, and that operators will likely struggle to justify 3G investment once these networks are operational. By contrast, in May's opinion, 802.11, with its significantly lower cost points, higher throughput, ease of deployment and ability to grow via the "viral Internet" model, is poised to see significant growth and success in the coming years. He believes the essential building blocks are in place to support strong wLAN growth.

    In the pure 802.11 networking market, several former leaders, such as Proxim, Inc. and Symbol Technologies, Inc., and new consumer networking specialists including NETGEAR, Linksys Group, Inc. and D-Link Systems, Inc., "appear to have gained some of the momentum," says May. "On the corporate side, these contenders also compete, but play second string to the larger, more enterprise-focused systems of Cisco Systems, Inc., 3Com Corporation and potential entrants such as Nokia Corporation."

    The current landscape for wLAN systems companies also includes major personal computer (PC) vendors that have begun to embed 802.11 in laptops, as well as traditional communications original equipment manufacturers (OEMs) such as Motorola, Inc., Nokia and Ericsson. May believes the adoption of 802.11 technology by PC vendors and communications OEMs represents a major catalyst for the growth of the industry.

    In addition, in the wireless 802.11 chipset market, Intersil Corporation  holds the leading position. "Its leading 65 percent market share and strong customer base should position Intersil to benefit substantially from the growth of the wireless LAN market," says May. However, on the competitive front, several newcomers to the wLAN space have made strategic challenges to Intersil's market-leading position in 802.11 in recent months. May believes market leaders like Intersil face increased competition from incumbent integrated circuit (IC) manufacturers such as Lucent Technologies, Inc., Agere Systems, Inc., RF Micro Devices, Inc., Texas Instruments Incorporated, Analog Devices, Inc., Infineon Technologies AG, Broadcom Corporation, and Marvell Technology Group Ltd.; private companies such as Resonext Communications, Inc., and Atheros Communications, Inc.; and Taiwanese vendors such as Realtek.

    U.S. Bancorp Piper Jaffray, a subsidiary of Minneapolis-based U.S. Bancorp (NYSE: USB) , is a focused securities firm comprised of three divisions: Equity Capital Markets, Fixed Income Capital Markets and Private Advisory Services. The firm provides a full range of investment products and services to individuals, institutions and businesses. The firm has over 120 offices in 23 states across the country. The Equity Capital Markets Division focuses on the needs of growth companies in the health care, technology, financial institutions, consumer and communications growth sectors. The firm has a national reputation for its expertise in fundamental research and equity and debt financing. The Fixed Income Capital Markets business provides bond issuers, individual investors and institutional investors expertise in investment banking, underwriting, trading, sales and research. The firm offers innovative solutions in corporate and government debt financings with particular expertise in corporate, health care/hospitals, real estate, higher education and government debt. The Private Advisory Services division financial advisors provide guidance in retirement planning, education planning, estate planning and wealth accumulation. Investors select from a wide array of products, including fee-based products, stocks, bonds, mutual funds, annuities, insurance and trust services. U.S. Bancorp offers a comprehensive range of financial solutions through U.S. Bank, U.S. Bancorp Asset Management, U.S. Bancorp Investments and U.S. Bancorp Piper Jaffray. For more information on U.S. Bancorp Piper Jaffray, visit http://www.piperjaffray.com/ .

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CONTACT:
Dana H. Wade
Public Relations of U.S. Bancorp Piper Jaffray,
+1-415 277-1556