Study Predicts Steep Ramp-Up in WLAN IC Revenues

By Matthew Peretz

October 23, 2001

The rapidly growing 802.11b and 802.11a product markets are creating a burst of activity in the IC market

A report issued by Allied Business Intelligence (ABI) yesterday highlighted the expected growth in the WLAN integrated circuit (IC) industry occurring as a result of the frenzy of activity in the wireless LAN sector in general.

The report stated that revenues grew from $71 million in 1999 to $257 million in 2000. ABI stated that it expects worldwide WLAN-IC revenue to grow to $946 million by 2006.

ABI pointed out that while 802.11b products currently dominate market impetus, the newly arriving 802.11a products will gain significant market share despite concerns over range and power consumption in the 5 GHz market. ABI stated that it expects 2002 to be a test period of 802.11a products, with sales ramping up in 2003. By 2006, the analysis predicts that 802.11a and HiperLAN2 will account for roughly 64% of all WLAN chipsets shipped and 68% of revenues.

The report also predicts that the ferociously competitive IC market will spark innovative approaches combined with potential price declines in unit costs. This cost reduction will in turn spur volume increases as applications and embedded implementations become viable. ABI also predicted that the residential market will be a key factor in the increase, accounting for as much as 43% of all WLAN IC shipments by 2006.

Matthew Peretz is Managing Editor of 802.11-Planet.com



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