One of the few bright spots this year was the growth of Wi-Fi. But
even as the wireless-networking technology drew praise for its
potential, it became clear that it still had a lot left to prove.
The year started off with the christening of Wi-Fi as the only standard
for the wireless networking market, as rival HomeRF had the final nail
hammered into its coffin with the disbanding of the HomeRF Working Group. Gear
makers jumped into action, increasing the number and types of handheld
computers, consumer electronics gadgets and other products with built-in
Wi-Fi capabilities on the market.
The wireless-networking industry was carried by sales to consumers, who
were lured to Wi-Fi
gear by the higher throughput rates promised by products
with 802.11g technology. In the coming year, equipment combining all
current Wi-Fi standards--802.11b/g/a--is expected to lift the market.
Consumer sales were so good that networking giant Cisco Systems broke
from its traditional strategy of selling gear to large businesses and
entered the market for home networking by buying niche leader Linksys. The acquisition
placed Cisco on top of the consumer market for wireless networking gear,
underscoring its No. 1 position in the enterprise market.
However, corporations were not enthusiastic about adopting Wi-Fi, mainly
because security provisions such as Wired Equivalent Privacy were ineffective. The
Institute of Electrical and Electronics Engineers (IEEE), the Wi-Fi
Alliance and other influential industry groups tried to ease that
concern by releasing Wi-Fi Protected
Access, a protocol that is expected to appear in the 802.11i
security standard when it debuts in 2004.
However, those security measures weren't enough to convince the mass
business market. Vertical industries such as government, education,
health care and retail remained the ones most likely to install Wi-Fi
networks. Enterprise customers are expected to become more receptive to
Wi-Fi networks in 2004, with the completion of 802.11i and efforts by
developers to .
Intel pumped $300 million into a marketing campaign for its Centrino mobile
technology, which combines Wi-Fi parts and a processor for
notebooks. The chipmaker looks likely to continue its role as lead
cheerleader for Wi-Fi next year.
While gear sales took off, the reception for Wi-Fi hot-spot
service--public areas where wireless broadband is available--was cool,
causing some pioneers to pull back on their aggressive plans. But
carriers and retail partners such as Starbucks, McDonald's and Borders began to lay the
groundwork for future hot-spot installations, indicating
that they expect consumers to warm to the service.
In the future, the marriage of cellular networks with Wi-Fi networks
looks set to get a closer look from
major players, and bundling Wi-Fi service with another service
will likely become a common strategy.