Improved security, notebooks with built-in Wi-Fi and an eventual boom in mobile VoIP will cause the enterprise wireless LAN market to more than double by 2009, according to Dell'Oro.
Wi-Fi adoption is growing beyond vertical industries such as health care, education and retail that have special requirements for wireless, said Dell'Oro analyst Greg Collins. Enterprises in general are starting to invest in Wi-Fi as the cost in client equipment declines and security and management headaches ease. The advent of built-in client gear in most notebook PCs, such as Intel's Centrino chipset, has eliminated the cost of separate Wi-Fi cards and led employees to expect wireless capability, Collins said. Meanwhile, security and network management mechanisms have improved, he added.
The worldwide enterprise wireless LAN business will grow to $3.5 billion in 2009 from an estimated $1.1 billion this year. Enterprise wireless LANs are gradually evolving from independent access points to central wireless LAN switches with dependent access points, but current market leader Cisco is keeping up with trends in the market through moves such as its recent acquisition of Airespace, Collin said.
Meanwhile, in the consumer and Soho market, Wi-Fi is becoming an integrated feature in cable and DSL modems - a change that could alter the landscape of a business dominated by Cisco's Linksys division, Collins said.
Dell'Oro also predicts wireless LANs will proliferate in homes, but expects most of them to show up in a broadband modem from a service provider. The company forecasts sales of 19 million wireless LAN devices this year (not counting client products), but says that will grow to only 25 million in 2009. Meanwhile, the company expects service providers to ship 13 million broadband access devices with WLAN built-in this year. By 2009, this will rise to 67 million such devices, and 70 percent of all broadband access devices will come with a wireless LAN function, Collins predicted.
Such a move could lead to a shake-up among consumer wireless LAN vendors. The market is currently led by vendors such as Zyxel, Siemens and D-Link , while Linksys lags behind in market share. Linksys will have to develop stronger relationships with carriers to maintain its lead in consumer Wi-Fi, Collins said.
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