IDC reports wireless LAN market boom

IDC has attributed soaring growth across the wireless LAN (WLAN) market to a rapid adoption of broadband technology by consumers and SMEs.

According to its latest figures, the overall sector grew by 119 per cent in 2004 compared to 2003. This was driven by a strong performance from the wireless router and switch segments, which both increased by around 500 per cent year on year.

IDC telecommunications associate analyst, Shing Quah, said the plunge in the cost of broadband access had been the major driver for take-up of wireless technologies.

“The price war in February last year saw a massive jump in the use of broadband, and since then, people have been actively migrating to wireless technologies,” she said. “On top of an awareness push by vendors and resellers, there was also a noticeable decline in the price of wireless equipment.”

Wireless adoption in the enterprise space was also contributing to overall market uptake, Quah said. The introduction of the 802.llI and Wireless Protection Access 2 (WPA2) standards had helped many of these organizations to overcome concerns around security, she said.

“Rather than tear out their wired LANs, enterprises are using wireless as a complementary technology to increase employee mobility,” she added.

A symbiotic process between hardware vendors and end-users was also working to drive wireless uptake, Quah said.

“As of Q4 2004, 75 per cent of all new notebooks shipped came with wireless access cards,” she said. “Notebooks with mobile access are driving wireless networking as much as people wanting wireless networking are driving uptake of notebooks with wireless access.”

In the vendor rankings, Netgear dominated the 2004 WLAN market, followed closely by Cisco in second place and D-Link in third.

“Cisco rules the market when it comes to wired networking, but Netgear has done better with wireless,” Quah said. “Last year home and SME users dominated wireless take-up. But Linksys didn’t perform as well as it could have.”

IDC is predicting a more modest growth rate of 25 per cent across the market in 2005. As a result, resellers would have to do more to derive margin and value from wireless products, she said.

“Wireless LAN equipment by itself has become quite commoditized so resellers should look toward areas like home automation, or try to provide a more complete solution,” she said.

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