By Lisa Johnston
New products on display at the American International Toy Fair, held in N
Retail-level sales of no-new-wires home-network devices will grow 89 percent this year to $227 million in North America, with most of the growth coming from wireless-network sales, an Allied Business Intelligence report contends.
In 2006, no-new-wires sales will grow to $1.68 billion, up 509 percent from 2001's levels, and wireless will account for 55 percent of retail-level sales, the research company said.
Allied attributes most of the wireless growth to the growing popularity of 802.11b gear, which is dramatically raising its market share this year at the expense of wireless HomeRF technology.
"We expect that 802.11b will be the predominant wireless home networking protocol over the next few years, with HomeRF playing a far more peripheral role" as a niche technology that, unlike 802.11b, can integrate cordless phones into a home voice/data network, said analyst Navin Sabharwal.
HomeRF sales "lost momentum beginning late last year" to 802.11b, he explained, largely because of 802.11b's accelerated adoption by enterprises. Higher sales to businesses provided the economies of scale that let 802.11b suppliers deliver home products priced only slightly higher than HomeRF prices while delivering an 11Mbps datarate compared to HomeRF's current maximum of 1.6Mbps, he pointed out. In addition, consumers realize that an 802.11b home network lets them use their 802.11b-equipped business laptop at home, he noted.
The retail price of 802.11b network interface cards (NICs) fell by the end of last year to $125 compared to HomeRF prices of $100, he said.
As a result, products incorporating 802.11b technology will jump from 42 percent of wireless-home-network sales in 2000 to 71 percent in 2001 and maintain its lead through 2006, Sabharwal concluded. "If HomeRF 2.0[with a 10Mbps datarate] were out last year, the forecast might be different," he noted, but HomeRF 2.0 products won't be out until November 2001 in limited quantities.
With 60 vendors shipping 802.11b products for the home and enterprise compared to three companies shipping HomeRF products, he asked, "How many suppliers will HomeRF realistically attract?" Many suppliers, he noted, "have switched internal development to 802.11b."
In 1999, wireless accounted for 35 percent of home-network sales but jumped to 53 percent in 2000. This year, it will jump to 59 percent, then rise to 60 percent in 2002 before slipping to 57 percent in 2004, 56 percent in 2004 and 55 percent in 2005 and 2006.
This TWICE webinar, hosted by senior editor Alan Wolf, will take a look at what may be the hottest CE products at retail that will be sold during the all-important fourth quarter. Top technologies, market strategies and industry trends will be discussed with industry analysts and executives.