December 4, 2002 1:45 PM PST

Wi-Fi: As big as Budweiser?

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SANTA CLARA, Calif.--A key figure for standards body the Wi-Fi Alliance says the wireless networking industry will surpass the revenue of household products such as Budweiser beer by 2006.

In a keynote speech at the 802.11 Planet Conference, Dennis Eaton, chairman of the alliance and a marketing manager at Wi-Fi chip maker Intersil, predicted several changes for the industry in the coming year as well as some of its biggest hurdles.

During his speech, Eaton noted the wireless networking industry, which consists mostly of 802.11b-based products, is expected to bring in $2 billion in revenue this year. Those profits are expected to grow at a compounded rate of 30 percent through 2006, he said, surpassing revenue estimates of household products such as Budweiser beer, which is expected to bring in $5 billion this year.

"We're looking at Budweiser potential, going forward," he joked.

The Wi-Fi Alliance certifies the interoperability of 802.11b-based products and promotes the standard. 802.11b, also known as Wi-Fi, is a technology that allows the creation of wireless networks with a radius of around 300 feet.

According to Eaton, wireless networking shares characteristics of the Internet and the PC, boasting quickly falling prices, compatibility with emerging technologies, and support from large and small companies. Prices for PC cards that enable wireless networking capabilities in notebook PCs have fallen from $100 to $200 to approximately $50 to $75 per card, for example.

The falling prices of products that enable wireless networking have helped Wi-Fi's popularity in the consumer market, which recently overtook the corporate market in spending levels.

However, Eaton said, some of the chief obstacles in the industry include educating customers about what wireless networking can do, what sorts of transfer rates and range can be expected, and which standards are compatible.

Other hurdles include simplifying consumer setup, resolving roaming problems, and increasing the number of areas where consumers can access wireless networks.

In the coming year, Eaton said, smaller devices such as handhelds and cell phones likely will include wireless networking capabilities. Furthermore, he expects wireless networking to be integrated into consumer-electronic devices by the second quarter of 2003 and more desktop PCs to begin using Wi-Fi to connect to a network.

Wi-Fi's ability to complement other emerging technologies, such as broadband and next-generation cellular networks, will help its growth, Eaton said. Wi-Fi will accelerate the adoption of broadband and fill in the gaps of wireless coverage where third-generation service is not available.

Eaton was critical, however, of companies that jump ahead of the standards approval process for new products in order to gain market share.

"These actions undermine the value of an industry group," he told CNET News.com in an interview.

Eaton added that a study group within the Institute of Electrical and Electronic Engineers is looking into higher bandwidths for Wi-Fi but that products using new versions of Wi-Fi are about three to five years away from market and speeds have not been determined.

 

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