Feeds

802.11b chipset prices could fall 75% this year

New suppliers buying their way into the market

  • alert
  • submit to reddit

High performance access to file storage

The Register's Wireless LAN Channel

WLAN chips based on the 802.11b standard are set to get even cheaper as Taiwanese vendors start pushing low-cost wireless networking parts during the second half of the year.

And 802.11g parts are expected to become rapidly less expensive now that the specification has to all intents and purposes been ratified as a standard.

The average price of 802.11b chips this year depends on who you talk to - Allied Business Intelligence says $6.06, while TechKnowledge Strategies says $6.61, for example - but $6 is a good round figure.

But Taiwanese chip maker sources, cited by DigiTimes, say that figure could fall to as low as $4, and possibly even lower than that.

Last year, the average price was $16.06.

That's competition for you. While demand for 802.11b products is ballooning - chipset sales are expected to hit 41.3 million units this year, almost double 2002's total, 22.5 million - oversupply is driving down prices, and thus revenues. According to TechKnowledge numbers, revenues from the above sales will fall from 2002's $368.7 million to $340.2 million this year. In other words, an 84 per cent increase in shipments is yielding an eight per cent decline in revenue.

The price war is being driven by the entry of new chip makers, primarily in Taiwan. Acer Labs and SiS have begun sampling 802.11b chipsets, while VIA's networking chip subsidiary will put its own product into mass production in July. Almost all of the newcomers are looking to compete on price. The established players are being forced to do the same.

The need to maintain sales once faster, compatible and at last genuinely standard 802.11g parts come on stream is likely to keep prices down. TechKnowledge reckons 802.11g chips will hit an average $9.68 by the end of the year, just over half the $18 they commanded last year.

Countering the price decline is the fact that many 802.11b chipset vendors buy third-party radio transceivers to connect to their own MAC chips - the parts that handle the network protocols. A limited number of RF chip makers is keeping prices more stable, but again, a number of Taiwanese vendors are believed to be getting reading to enter that market and will drive down the price of RF chips and thus the cost of 802.11b chipsets as a whole.

That, say DigiTimes' sources, will push chipset prices below $4 during Q4. So come Q1 2004, we reckon they'll be giving them away. ®

The Register's Wireless LAN Channel

High performance access to file storage

More from The Register

next story
Broadband Secretary of SHEEP sensationally quits Cabinet
Maria Miller finally resigns over expenses row
A black box for your SUITCASE: Now your lost luggage can phone home – quite literally
Breakfast in London, lunch in NYC, and your clothes in Peru
Skype pimps pro-level broadcast service
Playing Cat and Mouse with the media
Beat it, freetards! Dyn to shut down no-cost dynamic DNS next month
... but don't worry, charter members, you're still in 'for life'
Like Google, Comcast might roll its own mobile voice network
Says anything's possible if regulators approve merger with Time Warner
EE dismisses DATA-BURNING glitch with Orange Mail app
Bug quietly slurps PAYG credit - yet EE denies it exists
Turnbull leaves Australia's broadband blackspots in the dark
New Statement of Expectations to NBN Co offers get-out clauses for blackspot builds
Facebook claims 100 MEEELLION active users in India
Who needs China when you've got the next billion in your sights?
Facebook splats in-app chat, whacks brats into crack yakety-yak app
Jibber-jabbering addicts turfed out just as Zuck warned
prev story

Whitepapers

Mainstay ROI - Does application security pay?
In this whitepaper learn how you and your enterprise might benefit from better software security.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Mobile application security study
Download this report to see the alarming realities regarding the sheer number of applications vulnerable to attack, as well as the most common and easily addressable vulnerability errors.