Mobile Week in Review: It's Summertime and the WLAN Market is Sizzling
By Dave Molta
As with most emerging technology markets, credible market research has a powerful impact on the wireless industry. Software and hardware companies track trends revealed by this research and, provided it makes them look good, use the market-share data in their marketing efforts. Responsible IT professionals also follow these reports -- albeit with a critical eye -- hoping to avoid developing a strategic relationship with next year's Enron.
A number of firms currently track the WLAN market, including In-Stat/MDR, Gartner Dataquest, IDC and Dell'Oro Group. It's a competitive business, and researchers at these companies seldom have either the time or the resources to do the kind of research that would pass tests of scientific validity. However, because they are constantly gathering data, research firms provide excellent indicators of overall market trends, particularly if the analyst who writes the report has significant experience tracking a specific market.
I recently received a summary of In-Stat/MDR's WLAN Market 2002 report, which was completed last month by Analyst Gemma Paulo. When I see these reports, I always give them an overall taste-test first. I look them over to see if there is anything that clearly contradicts my hands-on lab experience and the information I gather from talking to manufacturers and IT professionals. This report passed that test; it also revealed some additional insights.
First, the report stated that the high-end enterprise WLAN market performed poorly in the first quarter of 2002, a trend Paulo attributed to tight IT budgets and uncertainty regarding evolving high-speed WLAN standards like 802.11a and 802.11g. I agree with those conclusions, and I would also add that concerns about WLAN security are at least as big an impediment to adoption (see our recent cover package on wireless security).
Not surprising, In-Stat/MDR found the low end of the WLAN market, which is made up primarily of low-cost products from such vendors as Linksys, Buffalo, D-Link and Netgear, badly outperformed the enterprise players. Much of this can be attributed to the popularity of SOHO wireless gateway products (see our 2001 review of these products), but In-Stat/MDR also found that enterprise customers are using these low-end gateway and access point products in branch and remote offices. We've expressed concerns about the corners some vendors cut regarding the features and reliability of these low-cost products, but as second- and third-generation offerings begin to appear, things are definitely looking better.
More surprising to me was In-Stat/MDR's finding that Asia Pacific and European markets are driving much of the global growth in WLAN product volume. WLANs are particularly popular in Japan, South Korea, Singapore, Taiwan, Australia, the Nordic European countries and the United Kingdom. Global technology standards can be an extremely powerful, market-driving force, with the end result being lower cost and higher quality.
In-Stat/MDR also concluded that the embedded WLAN market is "finally taking hold." Leading vendors, including IBM, Toshiba, Hewlett-Packard and Fujitsu are shipping an increasing percentage of their notebook computers with integrated WiFi networking capabilities. The incremental cost of adding the mini-PCI wireless card is so low that many IT purchasers are undoubtedly equipping their systems with those capabilities, just in case they are needed. From a personal standpoint, I am very pleased with the integrated WiFi adapter in my Dell Latitude notebook.
Finally, there's 802.11a. In-Stat/MDR provided a somewhat ambiguous view of this emerging technology, citing "non-trivial volumes" of 11a equipment that made its way into customer hands in the first quarter of 2002. We've been fairly impressed by enterprise offerings from Proxim, Intermec and Intel, and we're amazed at the price points of Linksys, D-Link and SMC. While we're still reluctant to recommend an exclusively 11a-oriented infrastructure in an era when 11b is still dominant, prospects for multimode hybrid 11a/11b networks are very positive. Look for our review of 11a offerings in Network Computing later this month.
