Wireless access point prices crash

Manufacturers of wireless Lan switches are managing to maintain product prices and margins, despite intense price competition that is "wreaking havoc" on profit margins for makers of standalone enterprise-grade access points, according to newly published research.

The report from Unstrung Insider found that the wireless switch system market has "held up reasonably well, with average order size expected to increase steadily through 2005".

The report's author, chief analyst Gabriel Brown, said: "We do not expect street prices for wireless switches to decline dramatically this year.

"Orders of around $30,000 are seeing discounts of between 10 and 15 per cent, while orders worth several hundreds of thousands of dollars are seeing discounts of 30 to 35 per cent. It is not a fire-sale situation."

The study found that street prices for wireless Lan switch systems range between $600 and $800 per access point (including deployment), representing a substantial premium over standalone AP networks.

In contrast it noted that enterprise-grade access points now have an average list price of under $700 ($840 six months ago). Street prices for these products have dropped to the $400 range, putting enormous pressure on supplier and reseller margins.

Extrapolating from this pricing data the analyst firm noted that standalone access points have become "commodities" and warned that prices will plummet further. This led to security appliance vendors being "driven out of town", squeezed by switch vendors and low-cost newcomers.