Low 802.11b Prices Drive 2002 Wi-Fi Shipments, Report Says

Year 2002 proved to be a stellar year for WLAN volume growth, driven by the increasingly inexpensive and reliable 802.11b technology, according to In-Stat/MDR.

The market research firm reports that when all is said and done, business Wi-Fi hardware shipments are expected to show a 65 percent

However, that accelerated pace will cause prices to fall prices for 802.11b equipment, allowing total market revenues to grow by only 23 percent from 1.8 billion in 2001 to $2.2 billion in 2002, In-Stat/MDR predicted.

"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," said Gemma Paulo, a senior analyst with In-Stat/MDR, in a statement. "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 2.4GHz WLAN technology, and the advent of new enterprise infrastructure technology, will all shape the development of this market."

Similar findings came out earlier this month when Strategy Analytics reported that revenues from sales of broadband modems and gateways fell by 11 percent in 2002 as a result of a collapse in prices. The London-based analyst firm reported that sales of broadband modems in 2002 actually increased by 52 percent to 26.3 million units. It also predicted annual sales of 60 million units a year by 2008, representing an average growth rate of 15 percent.

In-Stat/MDR also found that 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 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, In-Stat/MDR said.

In addition, retail and e-tail sales of low-end router/AP devices and NICs, backed by rebates on Wi-Fi equipment, drove the small business and home/SOHO worldwide market growth.

In-Stat/MDR is owned by Reed Business Information, the parent company of Electronic News.