WLAN Shipments Up, Prices Down

Even in the midst of the overall telecommunications industry funk, 2001 proved to be a stellar year for business WLAN volume growth, according to In-Stat/MDR.

by ISP-Planet Staff [August 7, 2002]

Scottsdale, Ariz.-based research firm In-Stat/MDR reports that 2001 Wireless Local Area Network (WLAN) hardware shipments increased 175 percent, while prices fell fast and furiously.

In-Stat/MDR Analyst Gemma Paulo forecasts that business WLAN unit volumes will grow by almost 60 percent this year. Total end-use revenues, which increased 92 percent in 2001, are expected to increase by a mere 7 percent in 2002, due to falling prices for 802.11b equipment and the lower-than-expected prices of 802.11a products debuting on the market.

Paulo said that 802.11 security issues still factor into buying decisions, but that price for performance rules.

"To appeal to businesses, WLAN systems must be secure, manageable, scalable and cost-effective," Paulo said. "Although the main buzzword among corporate WLAN installations is 'security,' there are a number of other considerations that a business takes into account."

Although verticals continued to sustain the bulk of business WLAN purchases in 2001 and into 2002, low-end infrastructure equipment began to creep into an increasing number of small businesses, as well as into remote offices and small departments of large and medium businesses. With 802.11b hardware such a success in the market, but with overall revenues being trashed, vendors have been quick to differentiate products and begin thinking of new applications for WLANs.

Additional key findings in the report, titled Wherever, Whenever: WLANs Make Business Networking Nomadic, include:

• Asia Pacific, led by Japan and South Korea, noticeably broke out of the pack in 2001 and early 2002, and is expected to grab almost 25 percent of business WLAN unit shipments in 2002, surpassing Europe, the Middle East and Africa.
• Cisco Systems Inc., dominated the business WLAN market in terms of revenues in 2001, and also topped the charts in terms of unit shipments for the year. However, the business WLAN landscape has shifted over late 2001 and into early 2002, as Agere Systems, Buffalo Wireless, Inc. and Linksys topped Cisco in terms of unit shipments in the first quarter of 2002. Cisco, however, did hold on to its dominant revenue share in the first quarter.
• Combination 2.4 GHz and 5 GHz Network Interface Cards (NICs) are expected to drive the NIC segment of the market going forward, as end-users wish to have the ability to access whatever flavor of access point technology is within reach.

The report also analyzes events that affected the market in 2001 and early 2002, examining trends that will affect the market going forward.

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