Rocketing Up the Charts

By Eric Griffith

January 15, 2004

The popularity of Wi-Fi in the home hit a new high last year, primed by cheap prices, faster equipment, and embedded chips.

Not many markets can say they had a 214% increase in units sold last year from 2002, but Wi-Fi can. And this isn't even counting enterprise sales.

In-Stat/MDR of Scottsdale, Ariz., released a report this week called "Joe Schmo Has Wi-Fi: The Wireless Home Becomes a Reality" which takes a look at the numbers behind the popularity of Wi-Fi in the home, and the numbers are staggering.

22.7 million wireless cards and access points (APs) shipped last year, a 214 percent increase in the paltry 7.2 products sold in 2002. Revenue for 2003 will likely be $1.7 billion, a 140 percent increase over 2002's $700 million. Beat that, Lord of the Rings: Return of the King.

"Wireless routers did really well" in particular notes Gemma Paulo, senior analyst at In-Stat/MDR. They did well because the price of 802.11b products kept dropping and the emergence of 802.11g spurred people to buy as well.

Embedded Wi-Fi -- mainly in the form of Intel's Centrino chipset that put built-in wireless into laptops using Penitum-M processors -- was also a major factor.

"Centrino, the whole notion of it, the advertising, got people interested," says Paulo. The fact that the Centrino didn't even have 802.11g last year didn't hurt things, and people could easily get that embedded from vendors using Atheros and Broadcom chips by the end of the year, she notes. Overall, the multi-million dollar Centrino ad campaign helped drive consumers to shop for Wi-Fi in laptops, period. She says they probably saw the higher speed and bought it but says "I don't know if consumers even realized what they got was 11g versus 11b."

2003 was a major year for wireless multimedia and the devices that would bring digital entertainment stored on the home network to the living room, where it belongs. The first media units with 11g began to roll out. In-Stat -- and several announcements from the Consumer Electronics Show -- say many, many more will come in 2004.

The total percent of households in the United States with Wi-Fi stood at about 4 percent by the end of the third quarter of 2003.

While Intel, Broadcom and Atheros all had good sell-through to consumers and became market leaders, the use of the once leading PRISM chips of GlobespanVirata was slowed during the product lines acquisition from Intersil. Likewise Agere refocused and dropped behind. Paulo says overseas and Canadian manufacturers are making 802.11b chips so cheap that it's undercutting many these days, and the same will happen with 802.11g chips soon.

802.11a however, remains relatively unused at home as much as in the enterprise, though the trend may be for using the 5GHz technology as the backbone for multimedia wireless -- such as watching HDTV without cables -- in the home. Likewise 802.11a might work for Voice over IP (VoIP) in the office. Without either of these, Paulo says "I don't see a need for 11a."



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