CAHNERS IN-STAT RESEARCH HIGHLIGHTS: Wireless LANs set to take off

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With improved performance and lower pricing, wireless LANs are ready to take off, according to a report by Cahners In-Stat Group, a division of Newton, Mass.-based Cahners Business Information.

A notable endorsement of wireless LAN comes from Redmond, Wash.-based Microsoft Corporation, which is preparing to roll out the technology across its entire campus. This is a response to the increased mobility of workers who roam the corporate campus with laptop computers and are no longer anchored to their desks. Increased mobility of workers is driving acceptance of wireless LANs in many companies, not just the industry giants.

Until recently, slow performance held back wireless LAN technology. But vendors have embraced the new 802.11b high-speed standard, which places wireless LAN performance on par with wired Ethernet. Before the adoption of wireless LAN standards, users took a risk in implementing a vendor’s proprietary technology. IT managers were not willing to gamble by investing in products that were slower than their wireline equipment and might not work with their installed base of computers and networks. “IT managers will embrace the technology more heartily now that a high-speed standard is in place,” says Gemma Paulo, a Cahners In-Stat Group analyst.

Falling prices are giving wireless LANs a further boost. The first wireless LAN network interface cards (NICs) sold for $1,000 or more. Today, prices have dropped to as low as $200. That compares favorably with $50-100 for wired NICs.

In the past, many of the wireless LAN vendors were virtual unknowns. With major vendors such as 3Com Corp., Cisco Systems Inc., and Nortel Networks Corp. now offering wireless LAN products, IT managers’ comfort levels with the technology will rise, Paulo says.

In addition, wireless LAN vendors are peddling their wares more wisely than in the past. In the early 1990s, many wireless LAN companies marketed their products as replacements for existing wireline LANs. This strategy failed because most IT managers couldn’t be persuaded to replace perfectly good wired technology with wireless. Wireless LAN vendors no longer market the technology as a replacement for wired networks, but rather position wireless products as extensions to the wireline infrastructure.

Today, IT managers do acknowledge a need for wireless LAN technology, according to In-Stat research. Current and future users of wireless LAN technology–their numbers growing–are tuned in to the benefits of the technology:

Increased efficiency
The ability for workers to remotely access networks
Increased productivity
The ability for workers to use computers wherever needed

Wireless LAN marketers claim the ability to provide workers with remote access to corporate computers and networks improves the efficiency, productivity and performance of the company as a whole. That message is catching on with users. As a result, the wireless LAN market will grow from $771 million in 1999 to nearly $2.2 billion in 2004, a compound annual growth rate of 25%, In-Stat forecasts. //

Report information

Increasingly, enterprises are taking advantage of wireless technology to connect to the Local Area Network and, in the case of some progressive small businesses, the wireless LAN (WLAN) technology makes up the entire local network.

The Enterprise wireless LAN (WLAN) market will grow rapidly from 2000 through 2004, as enterprise MIS managers finally find the higher speeds, interoperability, and lower prices that previously had been missing from this once niche market. The market will grow from $771 million in 1999 to nearly $2.2 billion in 2004, a 25% compound annual growth rate (CAGR) for the five-year forecast period. The enterprise WLAN equipment market is made up of NICs (both mobile and desktop), access points, and building-to-building bridges.

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Table of contents

Executive summary
Methodology
Introduction to wireless LANs
Infrared
UHF narrowband
Spread spectrum
Down the road
Two choices: frequency hopping or direct sequence
How are WLANs used?
Wireless LAN applications
Wireless LAN market drivers and hurdles
Market barriers
Key marketing messages
Wireless LAN standards and interest groups
IEEE 802.11
802.11b
802.11a
HiperLAN1
HiperLAN2
Wide band frequency hopping
Bluetooth
HomeRF
Enterprise WLAN market shares
Frequency hopping
Direct sequence
Worldwide enterprise wireless LAN forecast
WLAN NIC market
WLAN access point market
Enterprise WLAN building-to-building bridge market
Enterprise WLAN IC forecast
Vendor profiles
3Com
Aironet/Cisco
Cabletron
Ericsson
Lucent
Nokia
Nortel
Compaq
Dell
Breezecom
Intermec
Raytheon
Symbol
Proxim
RadioLAN
MaxTech
NDC
No wires needed (NWN)
Zoom

List of tables

Table 1, “Enterprise WLAN end-use sales (US$m)”
Table 2, “Wireless LAN timeline”
Table 3, “Frequency hopping enterprise WLAN NIC unit (k) market shares”
Table 4, “Frequency hopping enterprise WLAN NIC end-use sales ($k) market shares”
Table 5, “Frequency hopping WLAN enterprise access point unit (k) market shares”
Table 6, “Frequency hopping WLAN enterprise access point end-use sales ($k) market shares”
Table 7, “Direct sequence enterprise WLAN NIC unit (k) market shares”
Table 8, “Direct sequence enterprise WLAN NIC end-use sales ($k)”
Table 9, “Direct sequence enterprise WLAN access point unit (k) market shares”
Table 10, “Direct sequence WLAN enterprise access point end-use sales ($k) market shares”
Table 11, “Worldwide enterprise WLAN annual unit forecast 1998-2004 (000’s)”
Table 12, “Enterprise WLAN annual end-use sales 1998-2003 (US$m)”
Table 13, “Enterprise WLAN NIC forecast by transmission type (000’s)”
Table 14, “WLAN NIC forecast by speed (000’s)”
Table 15, “WLAN NIC end-use sales forecast by transmission type (US$m)”
Table 16, “Enterprise WLAN AP unit forecast by transmission type (000’s)”
Table 17, “Enterprise WLAN access point forecast by speed (000’s)”
Table 18, “WLAN access point end-use sales forecast by transmission type (US$m)”
Table 19, “Enterprise WLAN bridge unit forecast (000’s)”
Table 20, “Enterprise WLAN bridge end-use sales forecast (US$m)”
Table 21, “Enterprise WLAN IC market forecast (000’s)”
Table 22, “Enterprise WLAN IC end-use sales (US$m)”

List of figures

Figure 1, “Frequency hopping vs. direct sequence”
Figure 2, “Typical WLAN configuration”
Figure 3, “Wireless data applications of current WLAN users (chart 1 of 2)”
Figure 4, “Wireless data applications of future WLAN users (chart 1 of 2)”
Figure 5, “WLAN technology matrix”
Figure 6, “WLAN technology time line”
Figure 7, “Frequency hopping enterprise WLAN NIC unit market shares (1H99)”
Figure 8, “Frequency hopping enterprise WLAN access point unit market shares (1H99)”
Figure 9, “Direct sequence enterprise WLAN NIC unit market shares (1H99)”
Figure 10, “Direct sequence enterprise WLAN access point units market shares (1H99)”
Figure 11, “Enterprise WLAN forecast 1998-2004 (annual, 000’s)”
Figure 12, “Enterprise WLAN end-use sales 1998-2004 (annual, US$m)”
Figure 13, “WLAN NIC unit forecast by transmission type (000’s)”
Figure 14, “WLAN NIC forecast by speed (000’s)”
Figure 15, “Enterprise WLAN access point unit forecast by transmission type (000’s)”
Figure 16, “Enterprise WLAN access point unit forecast by speed (000’s)”
Figure 17, “WLAN IC chipset components”