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Report: Wi-Fi gear moving on the double

Shipments of Wi-Fi devices quadrupled last year as 802.11g products picked up on the momentum set by 802.11b gear, which fell in price, according to InStat/MDR.

The Wi-Fi gear market continued to pick up pace last year, with shipments and revenue rising more than twofold as prices fell and customers adopted new technology, according to a new report.

Shipments of wireless networking cards and access points jumped to 22.7 million units, an increase of more than 200 percent compared with 2002, when 7.2 million units were shipped, In-Stat/MDR said in a report released Wednesday.

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The approval of the 802.11g standard and the availability of products using it picked up on the impetus set by the 802.11b standard, according to the research firm. At the same time, products based on the 802.11b standard dipped in price, spurring sales and so adding to revenue gains for manufacturers. Hardware revenue increased 140 percent to $1.7 billion in 2003, up from the $700 million the previous year, the report found.

"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," said a statement from Gemma Paulo, a senior analyst with In-Stat/MDR.

Wi-Fi was one of the few bright spots in the technology industry last year. But even as it drew praise for its potential, it became clear it still had a lot left to prove. Security and streaming video over wireless networks are expected to be hot topics this year, as industry groups turn their focus from increasing bandwidth to improving the experience of using wireless networks.

Manufacturers are expected to adopt and promote new standards that improve the use of wireless networks. But they will continue to look for ways to ride the momentum set by products using the 802.11g and 802.11b standards, the report said. In-Stat/MDR expects shipments of 802.11g to overtake 802.11b in products. It also said that prices for 802.11g devices will fall as new gear based on combined 802.11g and 802.11a technologies emerges.

The report predicted that Wi-Fi gear makers will expand their product portfolios in 2004 with media adapters, which allow consumers to wirelessly stream digital media.

Chipmakers that benefited from the surge in the Wi-Fi market include market leaders Broadcom and Atheros, as well as Intel, whose aggressive marketing campaign for its Centrino bundle of chips increased awareness of wireless networking.

A significant increase in the number of broadband subscribers in Europe in 2003 helped that region to nearly double its growth in shipments of Wi-Fi products, from 9 percent in 2002 to 15 percent last year.