Wi-Fi-mad consumers send spend through the roof

The Wi-Fi gear market continued its rapid growth in 2003, led mostly by consumer holiday sales, but companies saw a slight shuffle in their market share rankings.

The overall revenue for Wi-Fi wireless networking gear was up more than 55 per cent in the fourth quarter to $751.9m, Synergy Research Group said in a report Tuesday. Revenue was up about 40 per cent, to $2.5bn, for the year.

The consumer sector drove the overall market, increasing about 74 per cent in the fourth quarter to $517.6m and up 66 per cent to $1.6bn for the year. The enterprise, or large-business, segment also was up significantly - about 26 per cent to $234.3m for the quarter and about nine per cent to $869.7m for the year.

The consumer market has largely driven Wi-Fi sales growth for several quarters. The enterprise market has been slower to install wireless networks because of security and cost concerns. Still, there are indications that large businesses are beginning to use more Wi-Fi equipment.

The fourth quarter is generally a slower selling period for the corporate segment, while it is a prime time for consumers because of holiday deals, said Aaron Vance, an analyst with Synergy Research.

The consumer space was driven by price during the holiday season, and 802.11g products were the big attraction," Vance said.

802.11g is the latest Wi-Fi standard that allows data to be transmitted wirelessly. The maximum transfer speed is 54 megabits per second, but actual throughput is around half that.

The market share rankings of the top three companies in the consumer segment changed in 2003. NetGear replaced Buffalo Technology for the third spot. Linksys maintained its top spot with 22.3 per cent of the market, and D-Link Systems remained number twowith 17.9 per cent. Linksys is a division of Cisco Systems.

"Buffalo struggled as competitors moved into their market," Vance said. "They had more or less a monopoly in the Asia-Pacific region. But D-Link and NetGear made major moves there, and Linksys is now turning its attention there. It's only going to be tougher for regionally strong makers."

Market rankings also were swapped in the enterprise sector, but only for the quarter. 3Com took the third spot in market share from Proxim for the quarter, but Proxim remained number three for the year.

Cisco held the top market share spot with 36.2 per cent of the market, and Symbol Technologies remained number two with 15.5 per cent of the market.

Richard Shim writes for CNET News.com