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Worldwide WLAN Equipment Market Upside

Worldwide sales of wireless LAN equipment, including independent and dependent access points and WLAN switches and controllers, reached $1.9 billion in 2007, up 20 percent from 2006, driven by the increased rollout of enterprise wireless LANs and accelerating upgrading to 802.11n, according to the Infonetics Research latest market study.

Sales of enterprise single mode Wi-Fi phones also jumped, up 61 percent in 2007, as adoption of wireless VoIP continued to penetrate the enterprise market, their report shows.

Wireless LAN is becoming an increasingly ubiquitous technology and is commonly embedded into laptops, PDAs, phones, game consoles, and media adapters. Its widespread availability, affordability, flexibility and usage will make it an important technology even as other high speed wireless technologies like 3.5G and mobile WiMAX come to the fore.

Additionally, WiFi-enabled smartphones like the iPhone and RIM's WiFi Blackberry will significantly increase WiFi hotspot traffic. In January 2008, AT&T, which offers the iPhone in the U.S. market, took over Starbucks' hotspots from T-Mobile, giving this segment an injection of fresh stimulus.

Highlights from the Infonetics report include:

- For the quarter, worldwide wireless LAN equipment revenue is down 1 percent in 4Q07, following an all-time high in 3Q07.

- Worldwide WLAN revenue is forecast to reach $3.4 billion in 2011.

- WLAN switch and controller revenue is up 15 percent in 4Q07, driving dependent access point shipments.

- The speed benefits of 802.11n products are undeniable, but adoption will be gradual, as enterprises want to see a return on their 802.11g investments before upgrading.

- Cisco continues to dominate the worldwide WLAN equipment market, holding the #1 position in enterprise and service provider segments, with WLAN revenue now topping $200 million each quarter.

- The jostling between Aruba and Motorola for #2 position in the still-growing enterprise segment continues, with Trapeze Networks leading the rest of the chasers.

Infonetics' report tracks WLAN independent access points split by enterprise and service provider, dependent access points, WLAN switches and controllers, and enterprise single-mode Wi-Fi phones. WLAN hardware revenue is broken out by enterprise and service provider customers.

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