Report: New standard helps Wi-Fi growth

A new Wi-Fi standard is picking up where its predecessor left off, helping to maintain strong growth in wireless networking as the market prepares for combination products next year, according to a research report.

Redwood City, Calif.-based Dell'Oro Group released a report Wednesday indicating that sales in the second quarter of products based on the new 802.11g standard are more than making up for a decline in revenue from 802.11b-based products. The overall market for shipments of 802.11 products grew 6 percent in the second quarter compared with the first, while revenue increased 2 percent to $419 million.

Access points and client adapters that use 802.11 technology let individuals wirelessly tap into resources that are connected to a network such as broadband connections and printers. Networks using the older 802.11b standard allow data to be transferred at a maximum throughput of 10 megabits per second and about 4mbps on average. The new 802.11g standard enables transmission speeds of up to 54mbps, with about 22mbps as the average. Both standards use the 2.4GHz radio band, and they're interoperable.

Revenue from products that are based on the 802.11g standard grew 48 percent and made up 24 percent of total market revenue. At the same time, revenue for 802.11b-based products decreased, partly because prices for those products fell an average of 10 percent, as vendors tried to make 802.11b more appealing to consumers.

Although there may not be many uses for the extra throughput that 802.11g-based products provide, consumers are still attracted to the products.

"People always tend to choose more advanced features, especially if there isn't a significant price premium," said Greg Collins, director of the Dell'Oro Group.

Network cards that use the 802.11b standard carried an average price of $50, while 802.11g cards cost around $60. Access points or gateways cost $80 for 802.11b and $115 for 802.11g.

Collins added that the next big trend to help maintain growth will be combination 802.11g/a products, which will become more widely available starting next year, followed by the integration of wireless networking chips and technology into more devices such as PDAs, consumer-electronics gear and broadband modems.

Dell'Oro added that Cisco Systems held the No. 1 Wi-Fi market position in terms of revenue for the quarter, followed by Buffalo Technology, Linksys, D-Link Systems and Netgear. Cisco acquired Linksys in June.