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Research: Where's the Money?

Reports out today from separate research firms are looking at he issues of who is making (or will make) money in the world of wireless LANs. The indicators overall are good for companies going into some form of 802.11-related business. The gist is, hardware companies should not expect to break the bank, but access providers might be looking at a lucrative few years.

In-Stat/MDR's report entitled "Wherever, Whenever: WLANs Make Business Networking Nomadic" ($3,295 for the full report) has the good news and the bad news for 802.11 equipment manufacturers.

The good: WLAN product sales for businesses are up, as high as 175%, and will continue to grow another 60% in 2002. Security specialists, of course, have done quite well in the last few months, as 802.11x security remains the consistent bug in most business implementations.

The bad: Revenues will only increase 7% this year as the price on 802.11-based equipment, even the newer 802.11a products, continues to plummet. That's a huge drop from 2001, when end-use revenues were up 92% from the previous year.

Other highlights of In-Stat's report include the growth of the Asia Pacific region's use of WLANs, surpassing that of Europe, the Middle East, and Africa; Cisco's domination of the business WLAN hardware market shifting somewhat as Linksys, Agere, and Buffalo Technology top the total units shipped; and the projection that 802.11a/b combo NICs will be the driving force for network adapters going forward.

The real bright side in the WLAN world is probably in the Internet access side of wireless. According to the Alexander Resources' report "Broadband Wireless LAN: Public Space and the Last Mile" ($2,905 for the full report, $7,285 for multiple users), written by Tony Crabtree of Hampshire, England-based Juniper Research, the growing last mile WLANs, whether community freenets or fixed-wireless WISPs, will bring in worldwide revenue of $5.5 billion by 2007, with total worldwide public hotspot revenues around $9.5 billion that same year.

"I think that [802.11's] potential as a last mile solution has generally being overlooked," says Crabtree. "WLAN technologies will become very widespread in the distribution of broadband access from DSL/cable nodes to local communities. It is relatively cheap to purchase/install, has global standards in place, widely available equipment, no licenses to purchase, and a nice fat bandwidth to offer."

Last mile or fixed-wireless WISP revenue estimates for just North America go from $201 million this year to $1.867 billion by 2007.

The announcement says "last mile/fixed WLAN applications are growing at breakneck speed," especially in the United States. The relative ease of deployment for wireless "makes it an ideal solution for rural locations and developing economies, where a digital wired infrastructure is not widely available."

North America's public hotspots don't make much more than the last-mile WISPs today ($219 million for 2002) but their revenue be almost one-third larger that of WISPs in 2007 ($2.584 billion).

Europe, China, and the Far East will also have huge potential growth in the next five years.

Don't expect the big hotspot money to come from public food venues like coffee shops and bars, even though there are reportedly as many as 10,000 potential locations currently under discussion with various wireless providers. Business travelers will drive this market as the majority of revenue will come from convention centers, hotels, and airports, according to the report. Those locations will "become the focus of contention by the major WISPs and mobile operators."

Eric Griffith is the managing editor of 802.11 Planet.

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