Sales on upswing for faster wireless gear

By Dinesh C. Sharma
Posted on ZDNet News: Feb 24, 2004 10:03:00 PM

The market for wireless networking gear is maturing, with sales of 802.11g devices poised to overtake those of 802.11b this year.

		Get Up to Speed on... Wi-Fi Get the latest headlines and company-specific news in our expanded GUTS section.

In 2003, the Wi-Fi standard 802.11b was the most popular protocol, but sales of 802.11g equipment have already started to outpace the earlier specification, according to data market research firm Allied Business Intelligence (ABI) released on Tuesday. The company attributed the change in part to broadband connections that make it easier for consumers to share data among multiple home computers, which they can do through wireless networks.

Wireless networking has been catching on quickly both in homes and in businesses. In 2003, overall revenue for Wi-Fi wireless networking gear was $2.5 billion, up about 40 percent, compared with the previous year, according to Synergy Research Group.

ABI said that next year, the market will change again. Shipments for dual-band 802.11a/g networking gear will surpass those of 802.11g equipment, as new applications like multimedia become more available. By 2009, the company said, 95 million Wi-Fi networking equipment devices will be shipped.

The 802.11g wireless standard is a follow-on to 802.11b, running at a higher speed (as much as 54 megabits per second) and offering greater security. The two specifications, which are interoperable, function on the 2.4GHz frequency, along with microwave ovens, cordless phones and Bluetooth products. The 802.11a standard operates on the 5GHz spectrum, reducing interference problems; it's interoperable with the "g" specification but not with "b."

Falling production costs are fueling changes in the market as well. Average selling prices of 802.11g gear are now closer to those of 802.11b, and the same will happen with dual-band next year. Production costs of chips that go into wireless gear are coming down because of advances in production technology, ABI said.