Dell'Oro: Faster gear to drive Wi-Fi market

IDG News Service - Consumers won't wait to snap up new, faster wireless LAN gear this year, research company Dell'Oro Group Inc. said today, even though the IEEE 802.11n standard responsible for the latest breakthrough probably won't be approved until 2007.
Products based on the draft 802.11n specification, which was approved last week, will make up about 15% of all the home wireless LAN routers shipped worldwide this year, said analyst Greg Collins of Dell'Oro, in Redwood City, Calif. He expects consumers this year to buy about 3 million pre-standard 802.11n access points and an equal number of PC Card clients for notebook PCs.
The new standard is designed for real-world throughput of at least 100Mbit/sec. and will allow consumers to stream video around their homes, vendors say. Collins expects to see versions that are backward compatible with the current 802.11b/g standard as well as 802.11a, so users can upgrade gradually.
By 2009, Dell'Oro forecasts the faster gear will make up 90% of consumer wireless LAN shipments. Enterprises will wait for the standard to be ratified and notebooks to hit the market with integrated 802.11n chipsets, but they will begin widely deploying 802.11n networks in 2008 and 2009, he said.
Consumers' embrace of the long-awaited faster gear will push the worldwide market for wireless LAN equipment to $3.4 billion in revenue in 2006, up from $2.5 billion in 2005, according to Dell'Oro's forecast. It will give vendors a breather after years of declining margins and slow revenue growth in the market, because the early gear will be priced at a premium, he added.
That figure does not include DSL (Digital Subscriber Line) and cable modems with built-in wireless LAN capability. Those devices, which usually come from a service provider instead of being sold at retail, make up a growing portion of the consumer wireless LAN market, Collins said. Shipments of those devices doubled between 2004 and 2005, while shipments of stand-alone consumer Wi-Fi routers and access points grew just 30%, he said. The 802.11n gear will accelerate that trend as carriers roll out voice, video and data services and try to give consumers a way to share them around their homes.

"Wireless LAN in the consumer space is definitely moving toward becoming a platform for triple-play services from the service providers," Collins said.
For enterprises, 2006 will see a resurgence in the wireless LAN market, Collins said. Many were holding off in 2005 during an industry transition between traditional independent access points and wireless LAN switches with easier centralized security and management, he said.