Worldwide WLAN
Shipments to Grow in 2002 and Beyond

According to Gartner Dataquest, while many technology sectors are struggling, the wireless local area network (WLAN) industry is poised for double-digit growth.

by ISP-Planet Staff [September 27, 2002]

The industry will continue this consistent growth in 2003, as worldwide WLAN shipments total 26.5 million units, up from 15.5 million units in 2002. Revenue will reach almost $2.8 billion in 2003, up from $2.1 billion in 2002. Andy Rolfe, principal analyst for Gartner Dataquest's worldwide telecommunications and networking group, said the market would continue to experience healthy growth through 2007.

"The initial strong growth in the wireless LAN equipment market is being driven by the mobile data connectivity needs of professional portable PC users," Rolfe said.

"The increase in wireless LAN-enabled mobile PCs and PDAs will drive demand for wireless LAN access in a variety of locations to support mobile access to business applications," Rolfe added. "These include homes for teleworkers and 'day extenders', public spaces or 'hotspots', and enterprise premises."

Gartner Dataquest forecasts the penetration rate of WLAN systems into the professional mobile PC installed base will grow from 9 percent in 2000 to almost 50 percent by the end of 2003, and it is expected to surpass 90 percent by 2007.

Most WLANs are currently being purchased as an add-on PC adapter. But, in 2002, approximately 10 percent of all mobile PCs will be shipped with a WLAN card included, and it will increase to 31 percent in 2004. By 2007, Gartner Dataquest forecasts 68 percent of mobile PCs shipped will be capable of securing WLAN access.

Rolfe said that many top-tier mobile PC manufacturers already offer portable PCs with bundled wireless adapters.

"In fact, Intel recently announced its intention to incorporate wireless LAN capabilities into the forthcoming Banias mobile platform, which will drive wireless LAN integration in new mobile PCs," Rolfe said.

Because the industry has a great deal of potential, many vendors are trying to enter this market. In 2001, there were more than 70 vendors offering wireless LAN equipment, and more vendors are still entering the market. Which leads Rolfe to contend that the market is far too crowded.

"We expect to see significant failures, withdrawals and consolidation over the next two years," Rolfe said. "By 2005, apart from mobile PC vendors offering bundled or integrated wireless LAN, we do not expect there to be more than 6 or 7 significant adapter vendors. There will be a larger number of infrastructure vendors that survive, due to the greater differentiation in products."

North America is the largest region for wireless LAN shipments, as it's projected to account for 63 percent of shipments in 2002. Gartner Dataquest analysts said other regions would begin to account for a larger portion of the overall market.

Rolfe said that regulations have hindered WLAN deployment overseas, but that this would change over the next five years.

"Regulatory restrictions in Europe has delayed adoption, but this issue is now becoming resolved and there is strong demand for mobile computing devices in Asia/Pacific, particularly in Japan," Rolfe said. "This will result in the strongest wireless LAN growth being outside North America and, by 2007, North America is projected to account for 40 percent of shipments while Asia/Pacific and EMEA should have approximately 30 percent of the market."

The report, Wireless LAN Equipment: Worldwide, 2001-2007, provides a detailed breakout of the worldwide WLAN industry for the next five years.

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