Intel, Cisco Systems, Proxim and others are developing new high-speed wireless networking kits that are five times faster than current technology that lets people wirelessly link their desktop computers and laptops and share a Net connection.
But two competing high-speed wireless standards are in the works--with the second standard emerging from Europe--and tech companies are fearful of an industry split that could stifle an emerging market analysts predict will soon be worth several billions of dollars a year.
"People are confused enough already, so (companies are) making a big effort to get down to one standard," said analyst Gemma Paulo, of Cahners In-Stat Group.
The current 11mbps (megabits per second) data rate for the wireless networking technology is fast enough for consumers who do simple Web surfing, transfer data and share printers, said analysts and networking executives. But when more and more devices in the home get connected to the Net, such as Web-surfing appliances, TVs, stereos and other electronic equipment, faster speeds will be needed for a home network.
Whatever the use, people will find a way to fill up the extra wireless bandwidth, said Yankee Group analyst Karuna Uppal. "People used to think 56K modems were fast enough."
With the release of the high-speed wireless technology still about 10 months away, tech companies and industry standards groups are hoping to settle on one wireless technology and prevent a standards war like the one that has plagued wireless products and caused confusion among consumers.
This ongoing standards war pits Wi-Fi, or 802.11B--a technology standard for both home and office networks supported by companies such as 3Com, Lucent Technologies, Apple Computer and Cisco--against HomeRF, a technology standard for the home supported by Intel, Proxim, Motorola, Compaq Computer and others.
Now, in a similar vein, two industry standards groups have created next-generation, faster-speed wireless standards. The Institute of Electrical and Electronics Engineers (IEEE) has created 802.11A, a standard that will run at data transfer rates of 54mbps. That's nearly five times faster than the current 802.11B technology.
The European Telecommunications Standards Institute has created a competing high-speed standard called HyperLAN2 that is heavily backed by Ericsson.
An industry consortium created by Intel, Microsoft and Compaq Computer on next-generation wireless standards has brought the two sides together to talk in an attempt to work out their differences, said Rich Redelfs, chief executive of Atheros, a start-up that makes 802.11A processors.
"The PC industry was trying to send us a message, saying, 'Hey guys, get your act together. We don't want to go through the whole 802.11B-HomeRF discussion again. We want a single market,'" said Redelf, a former 3Com executive.
The problem with the 802.11A wireless standard is that it could cause interference with NATO satellites, Redelf said. The standards group is working to fix the standard, so it can be used in Europe, he added.
Most tech companies are sinking their research and development into 802.11A technology. For example, Cisco in November acquired 802.11A chipmaker Radiata for $295 million and expects to incorporate the technology in its Aironet family of wireless networking kits.
The worst case scenario
While no one knows how the standards issue will shake out, analysts and networking executives say the worst case scenario is that North America will use the 802.11A standard, while Europe will use the HyperLAN2 standard.
"We're rooting for 802.11A and hoping our industry can converge around that and not have multiple standards, but if we have to, we'll support HyperLAN2 in Europe," said Lynn Chroust, Proxim's product marketing director.
Analysts and networking executives expect the first 802.11A networking products will ship by the end of this year. But they don't expect the market to take off until early 2003 because the early products are expected to be expensive.
Proxim will ship an outdoor product during the first quarter of 2001 that wirelessly links office and school buildings together. Intel executives say they will release their products in 2002.
"Obviously, it will enter the business market first, because the higher data transfer rates are more crucial for businesses," said Uppal.
Once the high-speed wireless technology becomes popular in the corporate market, it will help drive down the prices for consumers, Uppal said.
The current wireless networking kits operate in the 2.4GHz frequency, where cordless phones and microwaves operate. So they can cause interference because they're using the same portion of the airwaves. The new high-speed wireless standards operate in the 5GHz frequency, so there won't be any interference problems, analysts say.
While some corporations could be holding off on buying wireless networks until the 802.11A technology is released, analysts say they don't expect 802.11B to become obsolete anytime soon. The 802.11B technology will not be able to communicate with 802.11A technology, but they can coexist side-by-side in an office network, according to executives.
Analyst firm Cahners In-Stat Group predicts the corporate market for wireless networking kits will grow from $1.3 billion in 2000 to about $3 billion in 2003.
Technology companies are hoping they can provide a smooth transition to the higher-speed wireless networking technology, said Barry Davis, an Intel marketing manager for wireless products.
"The ultimate goal," he said, "is one worldwide standard."