Wi-Fi gear grows in popularity as prices plummet

Despite a rough fourth quarter, 2004 was a good year for the Wi-Fi equipment market.

Worldwide revenues for wireless LAN gear rose 15 per cent to $2.8bn, according to a recent report from Infonetics Research called Wireless LAN Equipment.

Thirty-six million units shipped during the fourth quarter, up 51 per cent from 2003, and Infonetics predicts that number will reach 80.4 million by 2008.

Fierce competition during Q4 led to price drops for wireless broadband gateways and access points, which in turn caused revenue to fall 21 per cent from the third quarter to $619m. This downward trend will only continue in coming years, says Infonetics.

Revenue for 2004 was split just about even between the consumer and business markets. Growth is expected to continue for both areas though use of wireless broadband gateways in home should rise "spectacularly", according to the report.

Voice over IP and RFID are two of the applications seen to be driving growth this year, according to Richard Webb, directing analyst at Infonetics and author of the report.

Cisco continues to dominate the market, with 17 per cent market share on its own and an additional 15 per cent for products made by Linksys, which Cisco bought in 2003. D-Link is third, followed by Netgear.