Sales of Wi-Fi gear jump, prices fall

Sales of wireless networking products nearly quadruple for 2002, as prices fell because of increased competition and newer technologies, NPDTechworld says.

Richard Shim Staff Writer, CNET News.com
Richard Shim
writes about gadgets big and small.
Richard Shim
2 min read
Sales of wireless networking products nearly quadrupled in 2002, as average selling prices dropped, according to retail tracker NPDTechworld.

Overall annual sales of Wi-Fi related products hit $280 million in 2002, compared with $76 million in 2001. Meanwhile, average selling prices for access points and networking cards were down from $136 to $87. Most of the gear was based on 802.11b, the most popular standard with consumers. Products based on the 802.11a standard made up less than 1 percent of sales in 2002. The 802.11a standard has a bigger presence in large businesses, which are not included in NPDTechworld's data.

NPDTechworld analyst Steve Baker attributed the trend partly to the growing popularity of wireless networking technology, which has attracted big names such as Microsoft and Sony. Higher volumes in products have led to a more competitive market for manufacturers, which have responded by lowering prices.

Baker expects average selling prices for 802.11b-based products to continue to drop to around $75. Products using the 802.11g specification likely will take a premium position in the market because 802.11g allows for higher bandwidth networks, he said.

The 802.11b standard allows data to be transferred at rates up to 11mbps and uses the 2.4GHz radio band. The 802.11a standard transmits data at up to 54mbps in the higher 5GHz frequency and is not compatible with 802.11b. The 802.11g specification uses the 2.4GHz radio band, is compatible with 802.11b, and allows for the wireless transmission of data at 54mbps.

The 802.11g specification has not been formally approved by the Institute of Electrical and Electronics Engineers or the Wi-Fi Alliance industry groups, but device makers are shipping products based on the latest version of the specification.

Analysts have projected worldwide shipments of Wi-Fi equipment to jump from 6 million units in 2002 to 33 million in 2006. The addition of Wi-Fi technology to notebook PCs and DVD players should help the market to reach those numbers.

In late January, Wi-Fi chipmaker Atheros announced that Hewlett-Packard, IBM, NEC and Toshiba would include Atheros chips in their future notebooks. IBM, NEC and Toshiba already have notebooks in the market using Atheros chips.

Chipmaking giant Intel has been working on its own dual-band Wi-Fi chips to add to Centrino, which combines Pentium-M microprocessors, a chipset code-named Odem, and 802.11b or dual-band 802.11b and 802.11a Wi-Fi chips. The company will eventually add its own Wi-Fi chips to Centrino, but it has experienced an engineering delay. In the interim, Intel is using Philips Semiconductor's Wi-Fi chips in place of its own.