The Market Widens

With the launch of its new Wavelength Design Solutions business unit, San Jose,
CA-based radio frequency (RF) electronics distributor Avnet
RF & Microwave
gave notice recently that the 802.11 market is about
to enter a new phase.

Up to this time, wireless local networking has been about connecting computers
— and maybe PDAs. Computers are not the only things that need to be networked,
however. Scores of manufacturers of computer-based widgets — from medical monitors
to electronic scales for factories — are looking at adding wireless capability,
and Wi-Fi is the technology of choice for doing it.

Avnet RF, a product marketing division of electronic parts distributor Avnet, is a major dealer for Wi-Fi chip maker
Intersil Corp. as well as other RF
component vendors. It set up Wavelength
Design Solutions
(WDS) to help non-RF manufacturing companies design and
build new Wi-Fi- and Bluetooth-capable products.

"These customers typically need a lot of hand-holding," says Joel
Levine, president of Avnet RF. "Everybody these days wants to add a wireless
function to their widget. They may have some of the resources needed, but not
everybody has RF engineers."

WDS can provide customers with a complete wireless

integration solution, including component and subsystem products, software
and design services. Key to delivering these services are the 40-odd technical
sales reps Avnet RF already has in the field. Most are RF engineers.

The company is also building a back-office team to provide technical support
and project co-ordination services.

Most of the detailed expertise and design consulting, though, will be provided
by WDS partner-suppliers, a select group that includes Intersil, Motorola,
the semiconductor and components divisions of Philips
Electronics N.V.
, electronic parts manufacturer Infineon Technologies AG of Germany, and National
Semiconductor
.

WDS ties it all together. Because the parent company also has a semiconductor
product marketing group, WDS can draw on deep expertise in both the semiconductor
and RF aspects of projects, Levine points out.

"We can steer the customer in the right direction," says Lisa Schwartz,
director of technical marketing at WDS. "We’re similar to a general contractor
who might build your house, who knows enough about how homes are designed and
built to oversee every phase."

The new business unit can help a manufacturer take a project from concept to
finished product, or just provide help along the way. Some need more help than
others.

"The first thing they say when they come to us typically is, ‘What do
you recommend as a [Wi-Fi] chip set’ — and that’s basically Intersil — ‘and
can you give us a price and delivery date,’" Levine explains. "But
as we dig more and more into the account we try to find out if they can really
take the product from concept to production." Many cannot.

WDS is working under non-disclosure agreements with all of its current customers
so could not provide a lot of detail. One, though, is a manufacturer of electronic
scales used in factories. The products are networked using wired Ethernet to
provide remote monitoring. Now the company is looking to cut the wires by adding
a built-in Wi-Fi WLAN capability.

Another customer builds subscriber management and monitoring equipment that
cellular carriers install in the field. This company wants to add a version
of its product that can be networked wirelessly — again to allow customers
to centrally monitor remote devices.

A manufacturer of medical diagnostic equipment used in hospitals wants to do
something similar to provide remote patient monitoring at nursing stations.

"It’s pretty important for almost any of these manufacturers that they
create products that adhere to standards — and particularly 802.11," says
Schwartz. "The [medical device manufacturer, for example] knows that doctors
and others in that environment are going to be using [Wi-Fi-compliant] PDAs.
They don’t want to have a proprietary solution that won’t work with those devices.
So they add additional security and other features to meet health rules and
requirements, but they use 802.11."

While 802.11 will be central to much of what WDS does, it is by no means the
only technology available, notes Levine. Avnet RF can supply and work with virtually
any RF technology, though WDS will focus mainly on 802.11, Bluetooth and 3G
wireless.

"802.11 and Bluetooth are the buzz words of the week [in RF]," Levine
notes. "When we think of wireless LANs, or short-distance wireless networking,
we immediately think of those two."

But in some cases, he notes, WDS may even recommend a proprietary 2.4 GHz technology
from another supplier-partner, Lenexa, KS-based AeroComm.
"For some companies AeroComm might be a better solution," Levine says.
"A lot of it is driven by data rates, distance and cost. 802.11 is not
the be-all, end-all. We have to try and think what’s right for the customer."

The timing of Avnet’s launch of WDS is interesting. It officially began operations
in August, but it had been planned for many months, Levine says. Intersil first
approached Avnet three years ago with the idea of providing value-added services
around 802.11, Bluetooth and other RF technologies. Avnet didn’t believe the
time was right.

"If we’d made our move then, we’d have been way too far ahead of the curve
to see any reasonable return on our investment," he says.

So Avnet spent two years watching the market and gathering data about what
resources and partners it would need to provide the kind of cradle-to-grave
integration services Intersil was proposing.

The market was definitely not computer and WLAN manufacturers, for a couple
of reasons. They are the primary focus of major Wi-Fi chipset vendors like Intersil.
Many have their own in-house RF expertise. They don’t need the kind of help
Avnet could provide.

The market for WDS is what Levine refers to as Tier 2 and 3 manufacturers —
manufacturers of vertical market products who possess few if any RF skills.

"We were looking for the vertical market [products] to start to appear
before making our move," he says. "And we’ve just started seeing that
happen now. [The interest] has been increasing exponentially month to month
as people come up with creative ideas on how to use 802.11 or Bluetooth in their
current products."

According to estimates from Intersil, the market for 802.11b sub-systems for
OEM manufacturers will be in the $100 million range this year. "It’s
actually probably even higher than that now," Schwartz says.

Those totals, we assume, reflect just the first phase of OEM Wi-Fi products
— the kind of vertical industry devices Avnet is working on now. The question
is, what will happen when the home wireless LAN market reaches critical mass,
and refrigerator and thermostat manufacturers start wanting to put Wi-Fi in
their products.

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