A new report from Communications Industry Researchers (CIR) of Charlottesville, Va., is out and overall, the lead analyst for the report says, the future “looks good for the chipmakers.”
But that might not be enough for small vendors in the market.
Lawrence Gasman, the lead analyst and the president of CIR, says in the report, entitled WLAN Chipset Markets: 2003-2007 – Customer Requirements, Market Forecasts and Product Differentiation Strategies, that the current chipset market is about $938 million, but will almost double by 2007, to $1.7 billion US. That’s barring any economic catastrophe in the next couple of years, warns Gasman.
The report is the result of surveys CIR did with original equipment manufacturers (OEMs)
The report says OEM/ODMs place a high value on chips with enhanced range. Another major trend he saw was the growing desire for Wi-Fi in consumer electronics — the market for video-capable WLAN chips along should be about $350 million by 2007. Companies who focus in this area, such as Magis Networks, ViXs Systems, and XtremeSpectrum (which concentrates on using ultrawideband wireless instead of Wi-Fi) will likely help meet this demand. Also singled out: chipsets need to provide focus on switching and security for enterprise deployments. WLAN switches alone should be about $160 million of the chip market in 2007, according to the report.
“The key is to find a way to shine,” says Gasman. “If I were a chip vendor, I’d say, ‘I wonder if I can push that performance up by a significant amount.”
He expects there to be no diminished desire for wireless in the enterprise in the future, as the speeds and security and standards are finally at a point where administrators will take the technology seriously after over a decade of WLANs being available in some form.
So, who among the many, many chip vendors will come out on top?
“If we had this conversation a year ago, Agere and Intersil,” says Gasman, “those kinds of market shares don’t go away over night, due to the customer relationships that are set up.” In the surveys CIR conducted, however, Agere is on the descendant path, as customers had little nice to say because the company had problems getting products out. Intersil still gets good marks, but the rise of Broadcom, because of its push of 802.11g chips in consumer products, and Intel by pushing laptops with Centrino — which isn’t even using real Intel-created Wi-Fi chips yet — are the big story.
“Everyone expects Intel to be a big player,” he says.
Basically, anyone who just cranks out 802.11b or 11g chips is “not going to survive,” says Gasman. “It’s not good enough to say my performance is that much better than Agere or Texas Instruments, and my price is lower — you still won’t win. Vendors want name brand suppliers. Startups are going to have to look at new and innovated things to do.”
