Revenue for wireless networking equipment was $411 million in the first quarter, up 1 percent from the previous three-month period. Unit shipments for the quarter rose 6 percent to 4.8 million, according to the report.
The sector was bolstered by 802.11g wireless products, which began shipping in the quarter, the report said. Products based on the technology accounted for 16 percent of the sector's revenue, and 17 percent of shipments. 802.11g is a new specification that transmits data at 54mbps, uses a 2.4GHz band and is compatible with 802.11b equipment.
"We usually see declines in the first quarter," because it follows holiday buying in the fourth quarter, said Greg Collins, director of Dell'Oro Group. Last year, first-quarter revenue declined 3 percent from the fourth quarter, he said.
The sector, which includes products based on 802.11 technologies and equipment such as access points and network interface cards, is facing a transition.
While products with early versions of 802.11g have already hit the market, the technology. If the standard is approved, products are expected as early as August.
"The big story for this year will be how 802.11g affects the (802.11b) market and the standardization that will emerge," Collins said.
The Dell'Oro Group predicts that revenue for the wireless networking sector this year will be $1.9 billion, a 20 percent increase from last year, and that unit shipments will rise 60 percent.
For next year, Collins expects more products that combine 802.11g technology with 802.11a, which is not compatible with 802.11b or 802.11g.
"We've started to see some (combined) 802.11g and 802.11a solutions trickle out to the market during the first quarter, but likely next year, we'll start to see a dual-band market take off as things become price-competitive," Collins said.
The 802.11a technology, which accounted for less than 3 percent of the market in the first quarter, transmits data up to 54mbps via a higher 5GHz frequency.
802.11b, which represented 81 percent of the market in the first quarter, transmits data at 11mbps and uses a 2.4GHz radio band.