News
Issue #2002 - 39 (October 2002)
(Updated Oct. 15, 2002)

MARKET OUTLOOK & TRENDS

WLAN Growth Continues But Hotspots Could Face Uncertain Future

WLAN Grows - says Infonetics. Worldwide WLAN hardware revenues reached $392 million in the second quarter of 2002, according to Infonetics Research. Cisco and Linksys continue to lead the market, but seven other companies are not too far behind these two heavy hitters: broadband vendors NetGear, Buffalo, and D-link; enterprise solutions providers Avaya and Enterasys; and vertical market specialists Symbol and Proxim. These seven have been active for a while now in the WLAN market. The study found that vendors shipping 802.11a products are beginning to make inroads into the market, concluding that 802.11a WLANs will have a "significant market impact" next year.

The study's other findings:

• 62 percent of revenues came from access points; 38 percent from client network interface cards. 
• Enterprise buyers accounted for 40 percent of purchases; consumers for 55 percent. 
• Service providers accounted for 5 percent of the purchases, but this percentage will increase as service providers role out net access services based on public WLAN hot spots. 
• Just over half of revenues came from North American buyers. Europe accounted for 33 percent of purchases.

Infonetics expects these percentages to remain more or less constant in the third quarter of 2002.

Hot Spot Business Face Uncertain Future - Says Australian Analyst
Unease about the less-than-compelling hot spot business model has been augmented thanks to discomfort with the lack of regulation of the sector. Noted Australian analyst Paul Budde points out that the WLAN industry has neither technical nor business stability, and is in danger of causing another round of business disasters in the telecommunication sector. The lack of regulation is causing problems for end users, with basic ingredients such as reliability and security being ignored in favor of providing multiple services over broadband WLANs at the lowest possible price.

Source: Fierce Wireless

MobileInfo Comments and Advisory:  Hotspot growth may appear to be very fast. However, we have seen a very small penetration as compared to the potential of having a hot spot in every plaza, every major airport, every railway station, every hotel and so on. More haphazard and ad-hoc growth will come. Along with this growth, we need some structure, quality of service, performance management and systems management but strong security. We also need roaming between WLANs and wide area networks - GSM/GPRS and 1xRTT. Lots of challenges and opportunities for startups. Above all, we need network service providers to get into this space more heavily and with open arms and create true hybrid wireless networks of tomorrow.

Note: This news release may contain forward-looking statements. Readers should take appropriate caution in developing plans utilizing these products, services and technology architectures.  All trademarks used in this summary are the property of their respective owners.