Wi-Fi taking over the airwaves

Wireless Lans are taking over the world's airwaves, pushing up Wi-Fi equipment sales to $2.8bn in 2004, a 15 per cent increase from 2003, research released today has indicated.

According to Infonetics Research's latest quarterly market share service, some 36.1 million units of Wi-Fi kit shipped last year, up 51 per cent from 2003. The study predicts that unit shipments will continue growing through 2008, when they will reach 80.4 million, 123 per cent more than in 2004.

Enterprise and public hotspot segments continue to fulfil their growth potential, Infonetics noted. The "already explosive" consumer segment was found to be growing "spectacularly", with broadband users upgrading from basic wired to wireless gateways.

Due to plummeting selling prices from fierce vendor competition, quarterly revenue results were stunted, with worldwide revenue dropping 21 per cent to $619.4m between the third and fourth quarters of 2004.

This downward trend in revenue is, according to the analyst firm, expected to continue over the next few years.

Price erosion continued for access points, wireless broadband gateways and network cards, with 802.11b products in particular dropping dramatically in price since the launch of 802.11g.

"In 2004, wireless Lans emerged from a niche technology to become part of the IT mainstream, as well as a complement to other networking and wireless technologies," said Richard Webb, directing analyst at Infonetics and author of the report.

"Competition has increased, driving prices down and spurring further innovation in the market as wireless Lans continue to gain acceptance.

"The range of applications for wireless Lans is increasing, and we see voice over wireless Lans and RFID tagging in particular as two of the key applications driving the next phase of growth through 2005 and beyond."

The study found that Cisco continues as the worldwide wireless Lan revenue leader, with 17 per cent market share following its third consecutive $100m-plus quarter.

Cisco's Linksys subsidiary maintains second place with 15 per cent, showing that if taken as a whole, Cisco has a dominant position in the overall wireless Lan equipment market.

D-Link came third in worldwide revenue share, ahead of Netgear by a few points. Behind the four leading vendors, all other vendors claim a single-digit percentage of overall revenue share: Buffalo, Symbol, 3Com, ZyXEL, US Robotics and Proxim.