Report: Wireless Home Has Become Reality

The wireless home has become a reality, with the Wi-Fi hardware market achieving staggering growth in 2003, according to In-Stat/MDR (http://www.instat.com). The high-tech market research firm expects that 22.7 million NIC and AP units rolled out in 2003, a 214% increase from 2002’s 7.2 million unit shipments. The primary market drivers for 2003 were the availability of 802.11g products, and consequently the very cheap prices for 802.11b equipment. Notebooks with embedded Wi-Fi were also a driver on the client side within the home, as Dell, HP, Toshiba, Fujitsu and Acer pushed out notebooks with embedded 802.11b and 802.11g at retail, through catalogs, and on-line. Most of these notebooks included embedded Wi-Fi for no extra cost.

However, according to Gemma Paulo, a Senior Analyst with In-Stat/MDR, “Rapid price erosion is still a critical factor in revenue growth within this market, but the high volumes are allowing for revenue growth, even as prices fall fast.” Wi-Fi hardware revenues are expected to reach $1.7 billion for 2003, an increase of 140% from 2002 total revenues of $700 million.

The year 2003 was also the banner year for the first real introduction of Wireless Media Connections, i.e. Wi-Fi embedded into devices that bridge the gap between the PC cluster and the entertainment cluster, within the home. First generation 802.11b wireless media adapters rolled out from the likes of Linksys and HP, and PrismIQ rolled out support for higher speed 802.11g in its entertainment gateway. In-Stat/MDR expects that many low-cost home networking specialists will roll out 802.11g wireless media adapters with a focus on media streaming, in 2004.  

In-Stat/MDR also reports that:

  • In the Wi-Fi IC space, Broadcom and Atheros emerged as market leaders in the 802.11g and 802.11g/a segments, while Intel’s Centrino mobile platform was embraced by an increasing number of consumers choosing to purchase laptops. GlobespanVirata acquired Intersil’s WLAN division. Agere focused on wireless consumer applications and the development of its a/g solution.
  • Both 802.11b and 802.11g enjoyed rapid growth in the home in 2003. However, 802.11g shipments are expected to overtake 802.11b shipments in 2004, as 802.11g prices begin to fall fast, themselves at the mercy of falling dual-band a/g prices.  
  • The most notable geographic movement in 2003 was Europe’s growth, as it moved from 9% of total Wi-Fi home shipments in 2002, to 15%. Much of this growth in Wi-Fi is tied to Europe’s dramatic increase in home broadband subscribers in late 2002 and throughout 2003.

The report, Joe Schmo Has Wi-Fi: The Wireless Home Becomes a Reality (#IN030819RC), includes an overview of the Wi-Fi home equipment market, including 5-year forecasts of Wi-Fi NICs and Access Points, by technology and form factor. Wi-Fi home client forecasts are broken down by specific form factor, including PCMCIA, PCI, USB, mini-PCI, SD, CF, and other embedded modules. AP forecasts are broken down into Residential Gateways, standard APs, and Wireless Routers. Separate forecasts are provided for Wi-Fi Media Connections, i.e. those Wi-Fi –enabled products that fall into the consumer entertainment space.

The entire report can be purchased at http://www.instat.com/.