Wi-Fi: Shifting Gears

Driven by a major drop in equipment prices and an increased awareness of

wireless networking, 2003 appears to have been a great year for Wireless LAN or

Wi-Fi adoption globally. In fact, Wi-Fi was the brightest spot in the telecom

space last year, proving many a prediction right.

According to a recent report by In-Stat/MDR, shipments of wireless networking

cards and access points jumped to 22.7 million units, an increase of around 214

percent compared to the 7.2 million units in 2002. The report found that as

products based on the more advanced 802.11g standard became available, 802.11b

products dipped in price, spurring sales. WLAN adoption among business was

largely driven by expected productivity gains.

Among other factors that contributed to this growth was the significant

increase in the number of broadband subscribers in Europe in 2003 that helped

the region to nearly double its growth in shipments of Wi-Fi products, from 9

percent in 2002 to 15 percent last year. Intel’s aggressive marketing of

Centrino chipset too helped.

All this added to the revenue gains of Wi-Fi hardware manufacturers.

According to the report, hardware revenue increased 140 percent to $1.7 billion

in 2003, up from $700 million the previous year.

Home Comforts



Residential Wi-Fi emerged as a dominant area in 2003. An In-Stat/MDR report

indicated a significant growth in the deployment of WLAN in homes. According to

the report, the total percent of households in the US with Wi-Fi, stood at about

4 percent by the end of the third quarter of 2003.

Consumer craving for digital entertainment in their living rooms drove the

adoption of WLAN in homes. The first media units (supporting wireless

multimedia) with 802.11g began to roll out in 2003. No doubt, WLAN was

recognized as one of the technologies that would play a significant role in

shaping the consumer electronics industry. The Consumer Electronics Association

(CEA) of USA in October last year listed Wi-Fi (coupled with Ultra Wideband) as

one of the five technologies "poised to shape the consumer electronics

industry in the year ahead."

Even though 802.11a remained relatively unused at home, it emerged as a

technology that could in future become the backbone for wireless multimedia such

as watching HDTV without cables in the home.

Into the Fray



As the benefits of WLAN technology unravelled, WLAN equipment vendors not

only got aggressive with their existing line of products, but also began adding

a slew of new ones with added benefits and capabilities targeting both home and

business users.

Particularly interesting is the entry of leading telecom equipment vendors

like Motorola in a big way into the WLAN space. Motorola is taking a two-pronged

approach to WLAN. It introduced products and solutions that were aimed at both

enterprises as well as cellular operators. A few months ago it launched an

entire line of SOHO WLAN products using 802.11g. These include a router, access

point, a PC Card and PCI adapter, and a wireless-to-Ethernet bridge adapter. On

the other hand, drawing on its RF expertise, Motorola introduced a WLAN Seamless

Voice and Data Solution. The solution converges wired and wireless

communications networks, accessed by a single Wi-Fi/ cellular phone (the vendor

is also working on a phone handset that will combine WLAN and cellular

technology.) Contiguous voice and data service is provided to users across

enterprise networks, public cellular networks, and public hotspot WLANs based on

802.11 technologies. In fact, it is also collaborating with NEC on the

development of a converged Wireless Local Area Networks (WLAN), Voice over

Internet Protocol (VoIP) and cellular communication solution to create potential

cost savings opportunities, improved user efficiencies and new capabilities for

enterprise customers.

Earlier in January 2003, Motorola tied-up with Avaya and Proxim to develop

solutions for converged cellular, WLAN and IP telephony. On the other hand,

networking vendor Netgear focused more on making wireless LAN a key factor in

home entertainment. With the introduction of the WGT624 108 Mbps Wireless

Firewall Router in 2003, Netgear enabled consumers to utilize wireless

throughput up to ten times faster than 802.11b in support of bandwidth-intensive

entertainment applications and to enjoy range more than four times further than

802.11b for complete home coverage. Following on the heels of the WGT624 108

Mbps Wireless Firewall Router, Netgear’s WGT634U Super Wireless Media Router,

to be available in Q1 of 2004, is a full-featured 802.11g-compliant wireless

router equipped with a USB 2.0 port for direct connection to an external storage

device. In addition, Netgear is also coming up with MP101 Wireless Digital Music

Player, the industry’s first affordable and easy to use wireless network

adapter for home stereos. The MP101 connects any home stereo system to an

existing home network. Compatible with 802.11b and 802.11g wireless networks,

the MP101 features an antenna to enable a wireless connection to the home

network at one end, and connects to the audio-input jacks of any stereo system

at the other end.

Cisco’s Linksys, the number one provider of Wi-Fi products in the world,

announced a new addition to its wireless home product line, the Linksys

Wireless-B Media Link for music (WML11B), which allows users to listen to

digital music on their living room stereo. The Linksys Wireless-B Media Link

bridges the analog and digital worlds using Wireless-B (802.11b) networking to

deliver digital audio content from a PC to a home stereo. With the Media Link,

users can listen to MP3s, WMAs and play lists stored on a PC or other storage

devices on a home stereo, without running cables through the house. Linksys has

also come up with a new wireless multimedia product called the Linksys DVD

Player with Wireless-G Media Link (WMLD54G) which includes a high-end

progressive scan DVD player and the capability to wirelessly distribute digital

video, music, and pictures stored on a PC to view and play on a TV and/or stereo

system.

Another leading vendor D-Link announced this month that it has worked closely

with Atheros to be the first in the industry to introduce finished goods in

extending the wireless range with a firmware that can be downloaded free of

charge as an enhancement to the award-winning 802.11g Xtreme G Wireless

Networking family. The firmware extends the wireless network range by 100

percent while remaining completely compatible with 802.11g and 802.11b wireless

networks. The new Atheros powered extended range Xtreme G technology improves

radio sensitivity to extend the signal for users in large homes and buildings as

well as in places previously difficult to reach such as areas with concrete

walls and steel girders. The enhancement will be available as a free firmware

upgrade to Xtreme G networking products beginning mid-February. The new D-Link

Xtreme G wireless architecture provides enhanced radio receiving sensitivity -

up to 105dBm, over 20 db better than the 802.11 specification. With increased

sensitivity, wireless clients at a longer range are better able to identify and

process signal packets. At shorter distances, increased sensitivity translates

to enhanced throughput performance.

More Audible?



The year 2003 also witnessed a growing enthusiasm over voice over WLAN (VoWLAN).

It started with the announcement of a partnership between Motorola, Avaya and

Proxim to develop solutions for converged cellular, WLAN and IP telephony. The

three firms aim to provide a standards-based system that will enable users to

maintain permanent voice and data connections across enterprise networks, WLANs

and cellular networks.

A recently released market review by wireless research firm ON World

illustrates the extreme market forces developing in the VoWLAN market. "The

rapid growth of both Wi-Fi and Voice over IP makes the VoWLAN market one of the

best opportunities for developers today," says Mareca Hatler, ON World’s

director of Research. ON World projects that the VoWLAN handset segment will

grow by more than 89 percent annually until 2007 when there will be more than

653,000 VoWLAN handsets shipped. ON World projects that more than 85 percent of

all cell phones shipped in 2008 will be Wi-Fi enabled. With more than 850

million cell phones predicted to ship in 2009, this represents an extremely

large market. "We believe that dual mode (Wi-Fi/cellular) mobiles will be

the most significant development in the VoWLAN landscape," says Hatler.

Companies such as Kineto Wireless, BridgePort Networks and RadioFrame

Networks are already developing solutions that smoothly pave the way for the

inevitable convergence between mobile and enterprise communications. The rapid

growth of hot spots will also ensure this convergence. ON World projects that

there will be more than 700,000 hotspots worldwide by 2009. Until recently the

VoWLAN market consisted of only a very small handful of competitors such as

SpectraLink and Symbol Technologies but this is changing rapidly. New entrants

such as Vocera Communications have been grabbing many new customers over the

past six to nine months. Additional new players that are gaining much attention

include wireless soft phone developers such as TeleSym, IP Blue and Vedic

Technologies.

As Voice over IP (VoIP) and Wi-Fi continues to growth rapidly, related

technologies and standards will emerge to drive VoWLAN by increasing competition

and making it more attractive to end users. A few of these standards include

Session Initiation Protocol (SIP), the IEEE’s 802.11e quality of service

standard and the Telecommunication Industry Association’s in-progress

standardization for VoIP Gateways and WLAN infrastructures. SpectraLink is

pushing for a new IEEE task group to develop a standard for secure voice roaming

across wide scale enterprise deployments.

Hot Spots are Hot



Leading telecom operators in the US and Europe continued to build hot spots

through out 2003. With more than 3,900 locations, the T-Mobile hot spot network

is the largest public Wi-Fi network in the US. BT expects to challenge T-mobile’s

leadership soon. BT plans to deploy around 4,000 public hotspots by June 2004.

Only recently BT Openzone announced a plan to roll out wireless LAN access in

500 McDonalds restaurants in the UK.

An Allied Business Intelligence report predicts there will be rapid growth in

the global market for Wi-Fi hot spots, or private locations in 2004 around the

world to link to public wireless networks. The report says that hot spots will

grow to more than 200,000 locations within five years. "The greatest

opportunity could potentially be with the cellular providers, because it will

help them drive consumers to the data usage model," says Tim Shelton,

director, Wireless Research, ABI, adding that T-Mobile is currently the biggest

operator of hot spots around North America, other operators include Wayport, and

a host of smaller players.

Shelton expects that hotel chains and restaurant franchisees will potentially

use hot spot technology "to drive customers to their doors and to capture a

competitive advantage by offering an innovative wireless service." Shelton

predicts revenue generated from hot spot technology will rise from $59 million

in 2003 to $3.1 billion in 2008. Users pay either an hourly, daily or monthly

fee to access Wi-Fi networks.

However, Shelton also cautions that for the Wi-Fi market to grow over the

next few years, many things have to fall into place. For one, roaming agreements

between operators need to happen. Secondly, there should be a clear single

message to consumers on the value of Wi-Fi. There is also another catch. The

growth in hot spots might lose momentum if WAN technologies like iEV-DO begin to

be deployed by wireless operators as in Verizon’s case. EV-DO will provide

data speeds up to 500 kbps.

Whither 2004?



According to In-Stat/MDR, this year, manufacturers are expected to adopt and

promote new standards. In-Stat/MDR expects shipments of 802.11g to overtake

802.11b in products. It also said that prices for 802.11g devices would fall as

new gear based on combined 802.11g and 802.11a technologies emerges. Wi-Fi gear

makers are expected to expand their product portfolios in 2004 with media

adapters that allow wireless streaming of digital media.

According to another report on WLAN market trends by Sage Research, firms are

looking to capitalize on the productivity gains the networks offer. Sage says 80

percent of the respondents are planning to further deploy Wi-Fi in the first six

months of 2004, but that overall penetration remains low, with 65 percent of

those responding saying 10 percent of their employees or less currently use WLAN.

The biggest reason for these expansion plans is employee productivity

improvements. Security is the most common drawback mentioned by those surveyed.

Despite these concerns, companies still plan to expand WLAN use, with most of

them also planning to purchase improved security management controls.

In addition to the planned cross-departmental deployments, the findings of

"WLAN Adoption Trends 2004" strongly suggest that WLAN adoption has

progressed beyond the phase of early adopters, those firms such as management

consultancies and businesses with large traveling sales or field service

organizations. Usage is now becoming more widespread in industries such as

healthcare, retail, and manufacturing.

Ravi Shekhar Pandey