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Wireless LAN shipments more than doubled in 2002.

According to analysts Gartner, worldwide WLAN equipment shipments totalled 19.5 million units in 2002, 120 per cent up from 2001 shipments of 8.9 million units. Revenues increased a more modest 29 per cent because of the falling price of kit as the market becomes commoditised.

"As one of the few growth areas in network equipment, the wireless LAN market is attracting a large number of vendors. The resulting competition is forcing prices down, benefiting end-users by creating a wide choice of low-cost products," said Andy Rolfe, principal analyst for Gartner's worldwide telecommunications and networking group.

Buoyed by its strength in the wireless LAN adapter and wireless LAN broadband gateway segments, Linksys overtook Cisco Systems as the leading wireless equipment vendor in 2002, accounting for 14.1 percent of end-user spending ($306.4m). Cisco slipped to the No. 2 position with a 13.9 percent market share ($302.9).

Since these figures were compiled, Cisco has acquired Linksys (more anon) in a move that increases its grip. But unlike LAN switching and routing, Cisco does not control a majority of the market.

Major players include Buffalo Technology ($200.7m - 9.2 per cent of the market), D-Link ($174.5m 8 per cent) and Proxim ($172.3m - 7.9 per cent). Others account for 46.9 per cent.

Linksys also led the worldwide wireless LAN industry based on unit shipments in 2002 with 14.6 percent of the market (2.86 million units shipped). D-Link was the number two vendor with a 9.6 percent market share (1.88 million units).

According to Gartner, it has become much more difficult to challenge Cisco for leadership of WLAN market, following its acquisition of Linksys.

"In acquiring Linksys, Cisco is re-entering the high-growth consumer and SOHO network markets. We expect Cisco to expand the Linksys distribution channel to include telecom service providers that want home networking products to bundle with their broadband offerings," Rolfe said.

Gartner says the wireless LAN market will continue to grow, but it warns end users of the dangers of adopting proprietary technology.

"Demand for the benefits of mobile access to corporate applications will continue to drive strong growth in the sales of wireless LAN equipment. The market requires multi-vendor compatibility, since wireless LAN adapters are being increasingly integrated into new mobile PCs," said Rolfe. "However, the standards are as yet incomplete, particularly with regard to security. End-users and wireless LAN service providers should not rely on overly proprietary features, but should employ standard wireless LAN networks and provide security at higher layers."

Gartner Dataquest's report Wireless LAN Equipment: Worldwide, 2002 can be purchased here. ®

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