Wi-Fi: It Just Keeps Growing

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Changes in the way WLANs are thought of and deployed in businesses might make
this year the best yet for Wi-FI, but there’s little denying when you look at the
numbers for the year 2002 that it was the best wireless LANs have seen yet.

In-Stat/MDR of Scottsdale,
AZ, has a report out where they say that
2002 was a “stellar year for wireless LAN volume growth.” The $3,195
report, entitled ‘It’s
Cheap and It Works: Wi-Fi Brings Wireless Networking to the Masses,’
was first released in December 2002, but is currently being updated
with final numbers for the fourth quarter of 2002.

In-Stat senior analyst Gemma Paulo, says that while the year 2002 saw the shipment
of many new technologies for WLANs — including 802.11a products, dual-mode
products, and the first draft-only 802.11g products — the lower-end, SOHO vendors
“shipped loads of 802.11b products, both to small business and homes, as
well as into small departments and offices of larger businesses.”

She calls the volumes shipped by vendors like Linksys, D-Link, Buffalo Technology,
and Netgear “staggering.”

Overall, Phoenix, AZ-based Synergy
Research Group’s Fourth Quarter 2002 Wireless LAN Equipment market shares
report concurs. According to Synergy’s final numbers (both In-Stat and Synergy
gather data via surveys done every quarter with WLAN equipment manufacturers),
overall vendors shipped over 15.8 million Wi-Fi devices in 2002, to the tune
of $1.8 billion. That’s up from $1.4 billion in 2001, and $577 million in 200.

Specific companies doing well in enterprise product sales include the every
present Cisco Systems with 31.5%, followed by Symbol Technologies
(13.8%), and Proxim Corporation (8.9%). All
increased their revenue market share from the previous year by a minimum of
1.8%

The biggest loss in revenue market share went to Agere Systems, which flew from its high of 24.2%
of the market in Q1 ’02 to 3.5% in Q4 — no surprise since they sold off their
ORiNOCO
equipment business to Proxim. Proxim captured 11.3% of the revenue market
share for Q4, and a total of 8.9% for the whole year (up from 5.4% in 2001).

Sales of SOHO and small business Wi-Fi products accounted
for 55% of the total market. In the revenue market share for SOHO products, Linksys, Buffalo Technologies, and D-Link continue to dominate. D-Link in particular
had a large jump of 5% from Q3 to Q4 in 2002, which was reflected in its overall
year market share of 16% (up from 11.6% in 2001). Netgear also did extremely well in 2002, jumping
to 13% of the market, up from 5.9% in 2001.

D-Link and Netgear’s gains were Buffalo’s loss, as its 18.1% of the 2002 market
was a drop from the 23.7% it commanded in 2001 — so much for getting the draft-standard
802.11g products out early. Other SOHO market share losses
went to Agere (again, because of selling its product division), Intel and Proxim
(each spent the year concentrating on chipsets and business Wi-Fi), and SMC
Networks.

In the world of Voice over WLAN phones, where Spectralink and Symbol
compete alone, Spectralink retains the lead with 68.8% of the revenue market
share for the year. They even sold 32.7% more units than in 2001, but still
took a 5% loss in overall revenue from 2001 to 2002. Phones must be getting
cheaper along with everything else.

As for 2003, Paulo says the industry is likely looking at “a change in
how large scale enterprise’s structure their access point layout.” The
day of the access point that has all the smarts on board may be numbered as
companies like Symbol and Aruba Networks move toward managed, “dumb
or light access points being controlled by wireless switches.” Just what
defines a wireless switch is in question too by companies like Vivato, which will be shipping its own “wireless
switch” which used a phased array antenna to provide wireless coverage
to a whole building with a single product.

“[It] should be a real change in the market this year,” says Paulo.
“For the length of time 11b has been out, people have been working on access
points the way the are, to get them to perform well, just getting the radio
good enough…now they’re looking at new ways to put them in the enterprise.”