Wireless LANs that use the IEEE 802.11b and 802.11a standards stormed the market in the fourth quarter of last year, with revenue worldwide growing 21 per cent sequentially from the third quarter, market research company Dell’Oro Group Inc. reported Feb. 14.

As the market grew, its growth rate bounded ahead too: revenue had increased just 5 per cent from the second to the third quarter, said Greg Collins, an analyst at Dell’Oro, in Redwood City, Calif.

The fourth quarter saw the first market entry of products using the new 802.11a standard, which offers higher performance than the earlier 802.11b – up to 54Mbps compared to a maximum of 11Mbps for 802.11b. Wireless pioneer Proxim Inc. and SMC Networks Inc. each introduced 802.11a products in the quarter, Collins said. However, the new technology accounted for less than 1 per cent of total revenue for the market of wireless LANs that use the IEEE 802.11b and 802.11a standards.

Total revenue for that market reached US$363.3 million. Revenue leader Cisco Systems Inc., which holds 20 per cent of the overall market and a whopping 45 per cent of the market’s enterprise equipment segment, saw already healthy revenue grow 8 per cent. Low-price equipment makers Buffalo Technology Inc., Linksys Group Inc. and D-Link Systems Inc. ranked behind Cisco and saw gains of 36 per cent, 28 per cent and 44 per cent, respectively.

Home LAN users are rapidly adopting 802.11b wireless LANs as lower cost equipment comes on the market, he said. Revenue of network access points (hubs through which clients on the LAN communicate) for small offices and homes grew 40 per cent in the quarter, compared to 12 per cent growth for enterprise-class hubs, Collins said. Revenue of client modules grew 15 per cent.

Business demand for the wireless LANs was strongest in specific industry segments, such as health care, manufacturing and retail, where mobility offers new capabilities. For example, some retailers are using 802.11b-equipped barcode scanners to keep track of inventory in stores, Collins said.

General enterprise adoption still is in an early stage as companies try to figure out how a wireless LAN can help their employees work. It can help managerial workers who attend a lot of meetings stay in touch with e-mail and information on the corporate network, he said. Adding employees to the network or moving workers from one desk to another also could be much easier with wireless LANs.

“A lot of IT departments spend a lot of time moving people around,” Collins said.

Experimentation with wireless LANs in enterprises in some cases is being held back by the weak economy, he added.

“I think they’re interested in it, but their ability to experiment is limited because they don’t have the funds,” Collins said. “A lot of the IT managers we’ve talked to have their budgets in maintenance mode,” he added.

Concerns have been raised over the past several months about the ease of intrusion into 802.11-based wireless LANs. However, those concerns are not significantly hampering demand, Collins said. Enterprises are taking advantage of added security features built into higher end equipment, and home users are not as concerned about security for their applications, namely surfing the Web.

Dell’Oro, in Redwood City, can be reached at