Infonetics Research`s latest report on wireless LAN (WLAN) growth figures worldwide makes interesting and exciting reading, if it weren`t for local business realities. This is the summation of the local market from one provider still investigating the best way to take its full suite of WLAN products to market.
Siemens, a telecoms and networking vendor, pours a dose of reality over wireless excitement with its revelation that it still hasn`t managed to get complete clarity over what revenue-sharing model will win the day in wireless hotspot provision.
"We all know security and reliability have been technical issues, supposedly stifling wireless uptake. And the regulatory uncertainty is another well-publicised matter. Those are issues troubling enterprise LANs, consumers and wireless service providers.
"But with the mix of participants in a wireless hotspot scenario, the revenue model seems to be the most uncertain area of all, with respect to WLAN in the service provider space," says Greg Cress, Siemens marketing strategist.
"(The entity in control and thus earning revenue) could be the hotspot owner, such as a McDonald`s, with no visible branding from the networks. It could be the network, treating franchises of a large enterprise customer as its range of extension points. Or it could be a billing broker," Cress comments. "Depending on the model accepted, all these players will have varying degrees of involvement."
Brett Orwin, head of Siemens Telecoms` carrier data solutions group, says Siemens provides the full mix of wireless devices - access points, network cards of varying types and more. "We also have a good idea of what technologies people will accept, whether they be 802.11 a-, b- or g-based," he says.
"Aside from these standard solutions, we`re also using partners to put together solutions that will best suit customers and the local environment, and this is part of the business case."
Infonetics findings
Given the above uncertainty, it would be difficult to draw comparisons between SA and the world in terms of WLAN uptake, other than to say we are lagging far behind on a number of levels, but that there is plentiful evidence of vendors and consumers straining to break the mould.
Infonetics` findings perhaps provide the clearest picture as to what awaits the local industry. The company reports that worldwide WLAN hardware revenue hit $481.9 million in the first quarter this year, and is expected to reach $2.01 billion this full year.
Access point (AP) revenue hit $304.7 million in the first quarter, a rise of 12% from the fourth quarter last year. APs account for 63% of total revenue, whereas network interface cards (NICs) make up 37%. The share of APs is expected to grow as NICs drop in price.
"Access points based on the 802.11g draft standard accounted for $33.5 million in revenue in their first full quarter of shipping, an immediate 11% share of access point revenue, which is forecast to rise to 28% of total access point revenue by the end of 2003," the report also states.
"There have been several consecutive quarters of WLAN growth, and within that, the proportion of revenue derived from enterprises is steadily growing," says Infonetics Research`s Richard Webb, lead analyst of the report. "Consumers make up 48% of revenue, enterprises 43%, and service providers 9%. Through 2003, the enterprise and service provider percentages will rise as penetration increases."
Webb adds that Cisco and Linksys continue to lead the market and are increasing the gap between themselves and the chasing pack (including D-Link).
Webb concludes that North America accounts for 58% of revenue, a number that will hold fairly steady throughout the year, and that the Europe, Middle East and Africa region is next at 23%.
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