Local WLAN market booms

Despite the global slow down that has plagued the telecommunications industry, sales of WLANs have boomed as prices drop and users recognise their benefit.

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By  Matthew Southwell Published  September 5, 2002

Despite the global slow down that has plagued the telecommunications industry, sales of wireless local area networks (WLANs) have boomed. During 2001, worldwide shipments rose 175% and analysts at In-Stat/MDR are predicting that this will continue in 2002.

Key to this growth is the massive price reductions vendors are making on WLAN kit. For example, at the start of the last fiscal year the list price for a Cisco PCMCIA NIC was US$249 per unit. During August, the same product was available for US$169 per unit.

Avaya has also reduced its prices. Rifaat Al Karmi, data specialist for the Middle East & North Africa at Avaya, claims the company has knocked between 20-50% off its WLAN offerings and will continue to reassess its pricing on a regular basis.

“In fact, prices have come down so much that even home users can afford it, as wireless cards can be purchased for under US$100,” he says.

These decreases are borne out in In-Stat/MDR’s predicted revenue figures — the analyst house says that while the volume of business WLAN units sold will grow by almost 60%, total end-use revenues, which increased by 92% in 2001, will increase by a mere 7%.

The driving force behind the price reductions is the increased uptake of WLANs by the end user community. “Prices are decreasing through volume production, increased competition and a general commoditisation of the marketplace,” comments Ian Philips, manager, product marketing, Cisco Aironet Solutions.

“Whenever any sort of technology is introduced to the market it is a little more expensive because the volumes are small. However, at Avaya we now have a high demand so our costs have come down and we have been able to reduce the price,” adds Al Karmi.

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