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Sales Of Wireless Networks Fly High In 2002

Low prices and overall reliability helped persuade consumers to buy wireless networks in record numbers last year, according to a report from In-Stat/MDR.

In-Stat, based here, reported last week that when the final tally is made consumer shipments of 802.11b, or WiFi, products will have increased 160 percent to 6.8 million units in 2002. Gemma Paulo, In-Stat’s senior analyst for enterprise and residential networking, said shipments to the enterprise market for the year are expected to be even higher at 11.6 million units, an increase of 65 percent. However, the falling prices that made these products so attractive to consumers will limit revenue growth to $2.2 billion, a 23 percent increase from the $1.8 billion made in 2001.

The price situation has given some companies a reason to pause for thought when it comes to selling wireless products at retail. Leslie Kirchman, marketing manager for Actiontec called the retail scene “a bloodbath” and in response Actiontec is exploring other channels, such as the Home Shopping Network.

“Some vendors are willing to lose money to hit certain price points,” she said, adding it is not a business practice Actiontec is willing to implement.

The company has started working with ISPs, the Home Shopping Network and mass merchants.

Kirchman agreed that wireless sales are poised to grow outside the 802.11b spectrum, particularly products that feature several types of 802.11 in one package. To take advantage of this Actiontec is in the process of rolling out a wireless hub and PC card that supports 802.11a/b/g. Pricing has not been fixed, but the devices should be out in the next few weeks.

Motorola also sees combination models as the way to go. John Burke, Motorola’s corporate vice president and general manager, said it will have a Motorola-branded unit sporting 802.11b/g by the early spring. Pricing has not been set. The company declined to include 802.11a as it is still too expensive, he said.

This introduction marks Motorola’s initial entry into the wireless home networking market as a branded vendor. The company also has a few products that include HomePNA, but these are expected to be phased out as wireless widens its price advantage over the phoneline based system. Burke said Motorola is also keeping an eye on the powerline-networking category but no product introductions are imminent.