Wi-Fi on the Verge of Mass Market Impact

By Michael Singer

December 04, 2002

The Wi-Fi Alliance estimates the current $2 billion industry could reach a 30 percent growth rate by 2005 spurring growth in related technologies.

SANTA CLARA, Calif. -- A standards group Tuesday said the wireless technology known as 802.11 or Wi-Fi should completely enter the mainstream by 2004 and has the potential to equal the sales of the most successful name brand consumer goods.

Speaking at the 802.11 Planet Fall 2002 Conference & Expo, Wi-Fi Alliance chairman and Intersil Strategic Marketing Manager Dennis Eaton says analysts predict the current $2 billion Wi-Fi industry should expand at an compounded growth rate of 30 percent to nearly a $6 billion industry, putting it on par with household name brands like Budweiser and in line with growth in the mobile PC industry.

"Once we get [wireless access], we get addicted to it," said Eaton. "We expect to be connected to wherever we are and the people we work with expect us to be connected wherever we are. 2002 represents the year that Wi-Fi has past the chasm in which some technologies fail between early adopters and the mainstream."

The Alliance says in the next two years mainstream adoption of 802.11 will result in the launching of more hotspots like those offered by Starbucks and more initiatives in the public access space. The infusion of 802.11 products should lower the cost even more. Devices in the $129 range two years ago are now retailing for $49. Wi-Fi is also expected to boom in Asia and the Pacific Rim courtesy of an aggressive Wi-Fi Alliance marketing campaign launching early next year. The Alliance is also forecasting the certification of three new 802.11 flavors 802.11g, 802.11e (quality of service) and 802.11h (5GHz speeds for Europe). Eaton also said Wi-Fi certified companies will do outreach to electronics retailers in the form of training and educational materials.

But the road to the estimated mainstream adoption of Wi-Fi in 2004 is still paved with loopholes such as interoperability and the all-important upgrade in security standards from Wired Equivalent Privacy (WEP) encryption to the new solution, called Wi-Fi Protected Access (WPA).

The upgrade cycle for WPA will be a combination of software and firmware in 2003 depending on the environment that you will use it in. For example, in the enterprise you would use it with an authentication server like a RADIUS server. Eaton said the new security standard is necessary while the IEEE works out its specifications for 802.11i.

When it is finished, 802.11i will tap into BSS but not IBSS or pre-authentication technology. The wireless standard is also expected to include key hierarchy, key management, Cipher and authentication negotiation and TKIP (a technology based on RC4).

While purchasing products after that certification would be prudent, Eaton said there is no risk in buying Wi-Fi certified products as long as you check with your provider on their upgrade plan.

Still, Eaton says Wi-Fi has high growth characteristics like the Internet, which spawned interest in the World Wide Web and subsequent growth in faster PCs and Ethernet connections. WiFi's approach is that 802.11 in its current "a" and "b" variants have rabid early adopter evangelism, compelling economics and coincident fallout of complementary technology in the form of broadband and even 3G .

"Wi-Fi will be an asset to 3G as providers are trying to fill in the gaps between high speed access to customers," said Eaton. "Pubic access will start to mature globally and We see that Wi-Fi and broadband to the home will help to accelerate the adoption of both of these technologies by consumers."

Eaton says part of the big sell of Wi-Fi products will be a combination of prepay services with greater participation from carriers and a utility model, in which wireless access would be offered as a supplementary service just like phone, heat and electricity are now.

The Alliance said in the next year dual-band products will ship in volume as laptop users are looking for a solution, more multimode products (Wi-Fi combined with Bluetooth, WAN, LAN, GPRS, 3G) and consumer devices will start to appear with Wi-Fi that could connect a set top box to a TV.



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