Look Back to Look Ahead at WLAN Sales

By Eric Griffith

February 25, 2005

Reports out this week indicate that, while sales of individual WLAN client cards are down, just about every other aspect of the Wi-Fi market is booming worldwide.

Forecasts for the future of wireless LANs remain bright.

In a report out this week from London-based Infonetics Research, the firm says that in 2004 the worldwide market revenue for Wi-Fi equipment was $2.8 billion dollars, up 15 percent from the previous year.

Synergy Research Group of Scottsdale, Ariz., concurs on the amount, but says the gains were even higher, up 30 percent.

The future forecast from both: Infonetics says by 2008, the market will carry 80.4 million units, implying that after that point shipments may stall or even shrink. Synergy says the money will also continue to increase: $3.444 billion for this year, and almost double by 2009 ($6.139 billion). However, that doesn't mean revenue will be up. Infonetics says the 21 percent drop it saw between the third and fourth quarters of last year is a "trend in revenue... expected to continue over the next few years," as prices for WLAN products continue to plummet as they have ever since the debut of 802.11g put 802.11b product prices in the basement.

In 2004, the overall sale of WLAN products to homes and SOHOs was $1.609 billion, says Synergy, up 23 percent from 2003. It's a market that will continue to grow as well, doing $3 billion by itself by 2009. "This segment continues to be driven by aggressive pricing, strong sales of 802.11g and 802.11a/g devices, and, to a lesser extent, the introduction of multimedia devices for the home," according to Synergy's quarterly update on WLAN equipment.

Enterprises continued to benefit as well, especially with the introduction of switches/controllers and "light" (or "dumb," or "thin") access points as a category. Such products amounted to $207 million in sales for 2004. That's just a drop in the bucket, considering one of the companies tracked, Airespace, was recently purchased by overall sales leader Cisco Systems for around $425 million. The growing success of light APs hasn't hurt sales of traditional APs, either, which grew 48 percent to $795 million last year. This growth, says Synergy, was driven by the growing number of deployments in the "carpeted enterprise."

Synergy sees voice over WLANs as what "will continue to drive the adoption of WLANs in the enterprise." That market was up 59 percent last year to $52.2 million, driven mostly by use of mobile voice in verticals like healthcare and retail. They expect the VoWLAN market to grow 30 percent annually over the next five years. Also likely to see growth is RFID tagging, according to Infonetics.

What's down? Client devices dropped 19 percent in sales, which is no surprise as more and more products are shipping with embedded Wi-Fi in them, most notably notebook computers with Intel's Centrino chipset or other Wi-Fi enabled chips.



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