90% of notebooks to bundle Wi-Fi by 2008

WLANs here to stay - in hardware at least

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The Wi-Fi hotspot bubble may yet burst, but WLAN access is going to play an increasingly important part in the notebook market over the coming years, according to the latest report from market watcher Strategy Analytics.

This year, some 24 per cent of notebooks will ship with built-in 802.11a, b and/or g support, around eight million units, SA reckons. By 2008, the figure will have hit 90 per cent - and there will be around 141 million WLAN-connected notebooks in use, the researcher claims in its report, Wireless Connectivity Options Beyond Cellular: WLAN and Notebook PCs, due to be published next Tuesday, 15 July.

Recent research from Forrester puts the figure at 80 per cent, but the principle's the same: come 2008 the vast majority of notebooks out there will have integrated Wi-FI.

This trend will be driven by two groups: notebook makers and networking vendors. The latter will increasingly promote WLAN usage in the enterprise, and the former will push WLAN integration as a differentiator.

We're a little less convinced of that last point, at least in the longer term. Yes, notebook makers will tout Wi-Fi, but pretty soon world+dog will be bundling 802.11 in one form or another, thanks to falling chip and module prices. It won't be long before first 802.11b and then g will become as important a differentiator as on-board Ethernet or USB ports. 802.11a's greater enterprise suitability should allow notebook manufacturers to better target the corporate market, but the rise of dual-band WLAN adaptors has already begun

In the short term, however, bundling Wi-Fi will help push system sales toward notebooks rather than desktops. Now that notebook sales have officially overtaken desktop sales - at least in US retail channels; in May, 54 per cent of system sales were notebooks, according to researcher NPD Intellect - the trend toward replacing desk-bound kit with more mobile machines seems confirmed.

Indeed, SA reckons that by 2008, 41 per cent of client and server hardware sales will be notebooks, up from around 25 per cent this year.

SA believes that shift will quickly extend into the enterprise arena over the next five years, primarily in the US, which will become the dominant market for notebooks with integrated Wi-Fi. The efforts of Intel, Cisco and co. to push wireless LAN technology will bear fruit when corporate IT begins to pick up.

One barrier to this progress is security. "Security concerns will remain an issue, particularly in the on-campus enterprise segment," warns David Kerr, VP of SA's global wireless practice. "However, security concerns will inhibit wireless data usage rather than actual notebook sales."

In other words, while there may be a lot of WLAN-enabled notebooks in use in 2008, quite a few may not be being uses to access wireless services, at least not on campus. Forrester's figures for the use of public hotspots (see Bluetooth to outship Wi-Fi five to one) suggests they won't be being used much off campus either, a point with which SA broadly agrees.

Incidentally, security worries may prove less of an impediment once the 802.11i standard is ratified, in around nine months' time and as the lesser Wi-Fi Protected Access (WPA) spec. takes off in the meantime. The issues surrounding the reviled Wired Equivalent Privacy (WEP) should soon be behind us.

However, enterprises in Western Europe and the US on average put WLAN infrastructure roll-outs fairly low on their current list of priorities, says SA senior analyst Neil Mawston. By and large, they're waiting at least two years before considering large-scale Wi-Fi projects, he says.

By then, they hope, budget restrictions will have been lifted sufficiently for corporates to replace their existing systems - "There are lots of pre-Y2K notebooks and desktops out there waiting to be replaced," says Mawston - and many of them will be notebooks. Next year will see the start of a big rise in notebook spending activity, SA predicts, rising through 2005/6, before settling down again toward 2007/8.

Next year will see Intel pushing much higher specced Centrino systems, based on the 90nm 'Dothan' Pentium M CPU with 2MB of cache and higher clock speeds than today's versions yet with comparable power consumption and battery life. Next year should see Intel finally deliver 802.11a and 802.11g wireless components to the Centrino platform. ®

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