Wireless local area networking, otherwise known as Wi-Fi, will mature in 2004, growing from being an enthusiasts’ niche product to becoming a fully fledged commercial proposition for business and consumer users, according to industry watcher Ovum.
Richard Dineen, a research director with Ovum, said that the 802.11x (wireless standard) family is gaining respectability. “With maturity supposedly comes respectability and blue-chip vendors like Cisco and Intel are beginning to impose order on this fragmented, chaotic market with high-profile initiatives,” he said. “Intel’s Centrino mobile technology has propelled wireless LAN into the public consciousness, due not least to a US$300m global marketing splurge. Cisco now looks set to dominate both enterprise and residential WiFi equipment with its CCX compatibility program and its March 2003 acquisition of leading home vendor Linksys.”
Dineen added that established telecoms operators – both fixed-line and wireless – are also gradually bringing their influence to bear, forming international co-operation agreements such as the Wireless Broadband Alliance (WBA). The WBA serves the dual purpose of ensuring multilateral service interoperability among members, but also turning up the competitive heat on upstart wireless internet service providers (WISPs) who cannot match its collective carrier-grade resources. “2004 will be a year of continued consolidation: the current landscape of some 150-plus Wi-Fi infrastructure vendors will necessarily be reduced with technological or process innovation being the criteria for survival and success among the small-fry,” said Dineen.
“Having enjoyed three years of unopposed hype, 2003 saw the first dissenting voices surrounding the public Wi-Fi business case. Doubters have begun to question the prospect of earning hard return on investment from deploying hotspot networks, rounding particularly on the poor scalability of current Wi-Fi technology and high recurring costs for back haul. Either way, there has been little hard evidence so far to prove the evangelists or the naysayers right or wrong,” he continued.
“In 2004, as more devices are enabled and services mature, we will gain better understanding of Wi-Fi’s credentials to provide wireless Internet and corporate remote access to a larger, broader market. In 2004, as testing and experimentation with roaming, service levels, tariff plans and payment options converge towards what one might consider ‘best practice’, we will then confidently be able to assess Wi-Fi’s long-term commercial prospects. No one has a crystal ball (apart from Harry Potter, perhaps), but I’m on the side of the optimists,” Dineen said.
From a technology point of view, 2004 will not be a typical year of standards in-fighting, he claimed. “Instead we will see the arrival of two key technology developments to the basic 802.11x standards. Firstly 802.11i promises to shore up most of the lingering doubts about Wi-Fi security, offering port-based authentication (802.1x/EAP) and stronger encryption algorithms (AES). This should help re-ignite Wi-Fi growth in the enterprise which has been fairly flat over the past year. Furthermore the 802.11e MAC enhancement will overlay 802.11b/g/a standards to support multimedia streams, interactive games and, perhaps most interestingly, voice over IP services,” he pointed out.
“802.11i and 802.11e together will patch up the two really glaring holes in Wi-Fi’s armour and the latter potentially opens up interesting commercial avenues for WLAN in the home and enterprise markets. For those vendors focusing on public Wi-Fi, commercialisation of ‘vertical’ handover technology to facilitate dual mode cellular/Wi-Fi roaming and work to increase the range of 802.11x access points will be crucial development goals for 2004 and beyond,” Dineen concluded.
By John Kennedy