Wi-Fi Adapters Turn Inward

By Michael Singer

August 24, 2004

A new study on Wireless LAN cards shows a fundamental shift in the industry towards embedded Mini PCI cards.

Those wireless LAN cards that go into a laptop, Tablet PC or PDA have just gone on the endangered species list, according to a new report published this week.

The credit card-sized devices -- sometimes with an antenna -- are quickly being replaced by embedded Mini PCI card adapters, said market analyst firm In-Stat/MDR research. The original design for the Wi-Fi enabling devices slid into a PCI card slot to allow a device to access 802.11 networks.

But in its report, Wi-Fi Inside: The Embedded Wi-Fi Paradigm, market analyst firm In-Stat/MDR found Wi-Fi Mini PCI cards represented 49.1 percent of the Wi-Fi adapters shipped, and enabled most of the Wi-Fi mobile PCs in 2003. Research author and In-Stat/MDR analyst Norm Bogen calls it a "fundamental shift" in one of the hottest technology markets.

"PC cards held a quickly eroding 38.8 percent market share in 2003 after dominating the market with a 58.3 percent market share in 2002," Bogen said in a statement. The news does not bode well for companies building external Wi-Fi adaptors, including D-Link, SanDisk, IBM, and Cisco's Aironet.

In-Stat/MDR is now predicting that the Wi-Fi Mini PCI card will continue to capture an increasing percentage of the total Wi-Fi adapter market over the next five years.

As a result of that healthy growth since its mainstream commercialization, Bogen said the worldwide Wi-Fi hardware market (i.e. network infrastructure and adapters) has finally surpassed $1 billion in (4Q 2003) quarterly revenues.

In fact, the In-Stat/MDR report, which analyzes trends in the worldwide Wi-Fi market from 2003-2008, predicts that the market for embedded Wi-Fi clients (including mobile PCs, PDAs and phones) should grow to a record 226 million units shipped in 2008. That's a rate of 66.2 percent year-over-year.

Possible reasons for the shift run the gamut of theories, including consumers not wanting to fumble with extra hardware while trying to connect wirelessly to a network. The technology itself has also vastly improved, as Mini PCI card manufacturers and even chipmakers like Intel, Broadcom, and Atheros have all begun shipping silicon embedded Wi-Fi components.

But put quite simply, customers are continuing to ask for their Wi-Fi on the inside of the device.

"There has been a significant growth in Wi-Fi-enabled notebook PCs, as 55 percent of the 32.1 million notebook PCs shipped in 2003 contained embedded Wi-Fi adapters," Bogen said.



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