U.S. Bancorp Piper Jaffray Sees Wireless Local Area Networks Reaching An Inflection Point
2002-08-07 09:26 - News Release
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In recent years, 802.11 technologies, also known as Wi-Fi, have developed considerably. In his new in-depth research report entitled The Wireless LAN Report, 802.11 - Disruptive Technology, U.S. Bancorp Piper Jaffray Senior Wireless Equipment Analyst Samuel May asserts that with these developments, service providers are seriously questioning their investments in third-generation (3G) mobile data networks, and are considering the alternative/threat that wireless local area network (wLAN) hot spots pose to attracting paying data users. May believes the industry is currently reaching a major inflection point for widespread adoption of 802.11.
"A fast rise in hot spots, networks serving specific vertical markets ranging from the consumer to the corporate side of the business, represents an inflection point, the second phase of wLAN adoption," said May.
In addition, consistent with the thesis outlined in his Global 3G Report (published April 2002), May believes widespread adoption of 3G mobile data networks will be significantly delayed, and that operators will likely struggle to justify 3G investment once these networks are operational. By contrast, in May's opinion, 802.11, with its significantly lower cost points, higher throughput, ease of deployment and ability to grow via the "viral Internet" model, is poised to see significant growth and success in the coming years. He believes the essential building blocks are in place to support strong wLAN growth.
In the pure 802.11 networking market, several former leaders, such as Proxim, Inc. (PROX, #>) and Symbol Technologies, Inc. (SBL, #>), and new consumer networking specialists including NETGEAR, Linksys Group, Inc. and D-Link Systems, Inc., "appear to have gained some of the momentum," says May. "On the corporate side, these contenders also compete, but play second string to the larger, more enterprise-focused systems of Cisco Systems, Inc. (CSCO, #), 3Com Corporation and potential entrants such as Nokia Corporation (#^)."
The current landscape for wLAN systems companies also includes major personal computer (PC) vendors that have begun to embed 802.11 in laptops, as well as traditional communications original equipment manufacturers (OEMs) such as Motorola, Inc. (MOT, #), Nokia and Ericsson (#^). May believes the adoption of 802.11 technology by PC vendors and communications OEMs represents a major catalyst for the growth of the industry.
In addition, in the wireless 802.11 chipset market, Intersil Corporation (ISIL, #>) holds the leading position. "Its leading 65 percent market share and strong customer base should position Intersil to benefit substantially from the growth of the wireless LAN market," says May. However, on the competitive front, several newcomers to the wLAN space have made strategic challenges to Intersil's market-leading position in 802.11 in recent months. May believes market leaders like Intersil face increased competition from incumbent integrated circuit (IC) manufacturers such as Lucent Technologies, Inc. (#), Agere Systems, Inc. (AGR, #), RF Micro Devices, Inc. (RFMD, #>), Texas Instruments Incorporated (TXN, #), Analog Devices, Inc. (ADI, #), Infineon Technologies AG, Broadcom Corporation (BRCM, #>), and Marvell Technology Group Ltd. (MRVL, #>); private companies such as Resonext Communications, Inc., and Atheros Communications, Inc.; and Taiwanese vendors such as Realtek. |
