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802.11b now just a commodity

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WLAN chipmaker Atheros is now selling more than a million 802.11b/g and a/b/g chipsets a month, the company boasted in a statement put out on the wires today.

We mention this otherwise unremarkable news release - 'Company sells product - shock' - not because of Atheros' braggadocio, but because of what it says about the dynamics of the WLAN market.

Atheros' statement highlights not Wi-Fi products as a whole but dual-mode 802.11b/g and triple-mode 802.11a/b/g products in particular. With relatively new market entrants based in Taiwan driving down the price of 802.11b chipsets because price is all they can compete upon - it's all anyone in the 802.11b business can compete on, frankly - more established players are looking to 802.11g as the next big thing opportunity.

Especially now that, as Atheros is at pains to point out, 802.11g is now a standard not a draft specification and the Wi-Fi Alliance had begun certifying 802.11g products.

But what of the 802.11b market? 'Fuggedaboudit,' shouts Atheros. The original Wi-Fi spec. is a "legacy.... product with limited data transfer rates" fit for neither man nor beast, the statement implies. Instead, the market is "quickly transitioning" to 802.11g. The older standard has, in short, become a commodity already.

As we reported last week, so too are the Taiwanese chipset makers, who have a razor-sharp understanding of the value of the right price-point. Many will have 802.11g product out by the end of the year - some a lot sooner - reducing the window open to the likes of Atheros to grab what sales it can before that part of the market becomes commoditised the way the 802.11b sector so quickly has.

Hence the reference to the triple-band products, which will form the core of Atheros and co's strategy when 802.11g does become commoditised. That may take some time yet. Quite apart from the time it will take for the low-cost chip vendors to join the market, Atheros and others are touting proprietary performance boosting technologies, designed to give 802.11g users better data transfer rates in mixed-mode (802.11b and g) environments.

Atheros' offering is Super A, while Intersil was until recently touting its Nitro technology, though presumably Globespan Virata will be promoting it once it completes its purchase of Intersil's WLAN chip business. The downside of the these technologies is that they only work with products from the one vendor, so while they make for nice-sounding marketing messages, they're of little use if different WLAN clients use different makers' WLAN chipsets.

And that is, after all, the whole point of standards.

Beyond 802.11g lies 802.11a, with its superior performance. Yes, both offer a theoretical maximum throughput of 54Mbps, but 802.11a comes closer because it operates in the less-noisy 5GHz band and not the crowded 2.4GHz section of the spectrum. No compatibility with 802.11b/g has held 802.11a back - that and the fact that it doesn't meet European regulatory demands.

The triple-mode devices address the compatibility issue, but the Taiwanese chip makers will likely enter this market far faster than they leapt into the 802.11g arena.

The in-development 802.11h specification will extend to 802.11a the two key features required to please the Europeans - transmission power control (TPC) and dynamic frequency selection (DFS) - and that will give the established players a way to stay ahead - universal 802.11a products - for a little while longer. Observers expect 802.11h to be ratified sometime around the end of the year.

And then comes the 802.11i security specification. The Wi-Fi Alliance may now be touting WPA (Wi-Fi Protected Access), but that's just a sub-set of the as-yet unratified 802.11i standard. 802.11i, the Wi-Fi Alliance admits, will impose levels of encryption that need dedicated hardware - it's the Advanced Encryption Standard (AES) that needs it - necessitating physical upgrades, not mere firmware updates.

Again, 802.11i is not expected to receive the IEEE green light until the end of this year or, more likely, early next year.

And then the commoditisers will win - unless Atheros and co. can find some new emergent standard to differentiate their products. We don't expect them to be quite so boastful in a year, maybe 18 months' time. ®

Related Stories

Taiwanese chip makers prepare 802.11g assault
Intersil to bow out of WLAN biz

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