Enterprise Wi-Fi: stand by for price implosion

Enterprise wireless LANs are about to crash in price, according to an analyst’s report. Hardest hit will be the traditional stand-alone access points from vendors like Proxim Corp., and security gateways or “appliances,” such as those from Vernier Networks Inc. or Bluesocket Inc.

Enterprise access points, which include better security and manageability than the consumer products, have held their price, but that cannot continue, warns Gabriel Brown, chief analyst at Unstrung Insider, whose pricing survey came out this week. Enterprise access points cost around £250 (US$457.93), while consumer access points can now easily be found for £35 or less.

“802.11b has been all but abandoned for the enterprise,” said Brown. The 802.11b enterprise access points cost an average of £220, he said, but those products still on the market are basically end-of-life designs, with the market leader Cisco Systems Inc. abandoning it altogether.

802.11g access points cost an average of £310, while multimode (a/g) access points cost £458, though that differential won’t stay for long, says Brown. Cisco still manages to charge a premium, with access points listing at £700, although the street price is likely to be two thirds of that, says Brown.

Appliances, like Vernier’s and Bluesocket’s are “superseded” by wireless switches, said Brown, so price competition will get more intense there. “In the appliance/gateway sector, prices are getting hammered,” said Brown.

Finally, wireless switches still sell for a premium. Systems currently sell for between £400 and £600 per port (a port on these systems is roughly equivalent to an access point), making them comparable in price to stand-alone access points, and a good deal when management and other functions are taken into account. However, the price varies considerably depending on how many access points are attached to the system, and the systems all bundle different amounts of software: some include RF management and security while others make them into extra modules.

However, those prices won’t last: “The basic problem is the plethora of competitors, combined with the paucity of real product differentiation,” said Brown. Prices will fall, to boost volumes, he predicted. Already, Symbol — the longest established wireless switch vendor — is the only company to really deliver on the “thin access point” promise, in terms of the price of those APs, which cost around £100 (for an 802.11b-only product).

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Jim Love, Chief Content Officer, IT World Canada

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