Attractive Cost of 802.11b Drove
Wi-Fi Shipments in 2002

    The year 2002 proved to be a stellar year for Wireless LAN volume growth, driven by the increasingly cheap and reliable 802.11b technology, according to In-Stat/MDR. The high-tech market research firm reports that business Wi-Fi hardware shipments are expected to rise 65% annually in 2002, to 11.6 million units and home shipments are expected to increase by a very healthy 160%, to 6.8 million units. However, fast and furiously falling prices for 802.11b equipment are expected to cause total market revenues to grow by only 23%, from 1.8 billion in 2001 to $2.2 billion in 2002.

    "In 2002, security continued to be the most talked about issue on the business side, while the Achilles heel of the home market remained multimedia support," says Gemma Paulo, a Senior Analyst with In-Stat/MDR. "In the year ahead, the continued growth and evolution of dual-mode 2.4/5GHz capable equipment, Intel's ability to push outs its Centrino mobile technology, the shift toward 802.11g as the preferred 2.4 GHz WLAN technology, and the advent of new enterprise infrastructure technology, will all shape the development of this market."

    In-Stat/MDR also found that:
     -- Many new types of hardware shipped in 2002: 802.11a NICs and APs;
        dual-mode 2.4/5 GHz capable APs; dual-mode 2.4/5 GHz NICs; and in late
        2002, the first trickle of pre-standard 802.11g products powered by
        Broadcom silicon.
     -- Although verticals continued to sustain the bulk of high-end business
        purchases, low-end infrastructure equipment flowed into an increasing
        number of small businesses, as well as into remote offices and small
        departments of large and medium businesses.
     -- The increasing rate of embedded 802.11b into laptops greatly
        increased, from 2 percent of NIC units shipped to businesses in 2001,
        to an expected 14 percent of total business client shipments in 2002.
     -- Brisk retail and e-tail sales of low-end router/AP devices, along with
        NICs, drove the small business and home/SOHO worldwide market growth.
        Retail outlets and Websites aggressively provided rebates on Wi-Fi
        equipment.

    The report, "It's Cheap and It Works: Wi-Fi Brings Wireless Networking to the Masses" (#IN020181LN) includes five-year forecasts of the worldwide total Wireless LAN (WLAN) equipment market, including Wi-Fi equipment, i.e. 802.11b, 802.11a, 802.11g and dual band 2.4/5GHz products. Business and home/SOHO (small office, home office) Wi-Fi market forecasts are included, by technology and equipment type. In-Stat/MDR believes the WLAN Market's main measurable components include Network Interface Cards (NICs) and infrastructure equipment, which includes access points and bridges. This report gauges the size of the current market, and provides forecasts for the future, based on products shipped and end-use sales of these three product components.

    About In-Stat/MDR
    In-Stat/MDR offers a broad range of information resources and analytical assets to technology vendors, service providers, technology professionals, and market specialists worldwide. The company stands alone in its ability to integrate both supply-side and demand-side research methodologies into a single comprehensive view of technology markets and products. This capability relies on a unique ability to cover the entire value chain from engineering-level technology, through equipment, infrastructure, services and end-users.

By Robert Hoskins