Microsoft Is Bullish On Wi-Fi

By Brian Morrissey

July 11, 2002

Promising the rollout of home networking hardware this fall, Bill Gates and Co. look to push along the adoption of 802.11 technology.

Microsoft said Thursday that it would soon begin making home networking products, marking a significant bet by the software giant that wireless local area networks (LANs) are poised for a mainstream takeoff.

The Redmond, Wash., company, said it will begin to sell a line of hardware products to enable customers to build home networks with 802.11b technology, or Wi-Fi .

"These products will enable consumers to set up a wireless network quickly and easily so they can share their broadband Internet connections, files and printers with other computers in their home or small office," Randy Ringer, general manager for Microsoft's hardware division, said in a statement.

Ringer said Microsoft could move Wi-Fi beyond the early-adopter phase and into the mainstream with simplified setup and maintenance. Microsoft has been reticent to provide greater details about the products, and Ringer said the outfit would reveal details of the products this fall.

"It's kind of an interesting move on Microsoft's part," said Joe Laszlo, an analyst with Jupiter Research. "You think of them as a software and services company, not a hardware company."

Microsoft's move is an endorsement of the growing popularity of Wi-Fi, which has established a foothold as the wireless networking standard. The company's Window XP operating system already supports 802.11b, and Microsoft announced plans in January to roll out a wireless portable monitor with Wi-Fi technology.

802.11b chipsets transmit data signals at 11 Mbps through an unlicensed portion of the spectrum at about 2.4Ghz, sharing the space with low-power signals from home electronics like cordless phones, microwaves, and garage-door openers. Wi-Fi has a range of about 100 meters from an AP to an enabled device.

Allied Business Intelligence, a telecom and networking researcher, estimates in 2001 16 million people used Wi-Fi; in 2006 it expects 60 million will. Public awareness of Wi-Fi's potential has been driven by the proliferation of public hotspots, which IDC pegs currently at 3,000 and expects to hit 40,000 nationwide in 2006.

Navin Sabharwal, an analyst with Allied Business Intelligence, said the move by Microsoft was likely more intended to push along 802.11 adoption, rather than make a full-scale push to be a player in making 802.11 hardware, which he described as a low-margin business.

"Microsoft has a history introducing products into categories to push the market along," he said.

Kurt Scherf, an analyst with Parks Associates, a wireless consultancy, agreed that Microsoft could push 802.11 adoption in the home, which he has called Wi-Fi's "final frontier."

"They are the biggest name in the industry and to have them to enter into the hardware and software [market] is a huge benefit to the wireless industry," he said.

Parks Associates projects wireless LANs will take off in the home, with both PC-to-PC data networks and a proliferation of streaming video and audio entertainment networks. By 2006, Parks forecasts one in five U.S. households will have a data network, quadrupling today's number. On the entertainment side, Parks estimates U.S. households will have 125 million products connected via wireless networks.

"The way I look at the home-networking market what Microsoft is doing makes a lot of sense," Scherf said. "They got into the entertainment side of things in a big way with the release of the Xbox. Bringing home networking to more and more households means more computer sales."

Laszlo said he would be interested in seeing how Microsoft ties its new offerings to its MSN service. "I would expect some creative bundling deals there," he said.

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