The Asia-Pacific region is witnessing a surge in deployment of WLANs (wireless LAN), with hardware shipments and revenue generated from the new gear surging, according to a report on the WLAN market in the region by Frost & Sullivan Inc.
In 2002, shipments in the Asia-Pacific region of WLAN equipment such as access points, network interface cards (NICs), and bridges grew by 130 per cent to 3.0 million units from 1.3 million units in the previous year. In revenue terms the market for WLAN gear grew 58.2 per cent in 2002 to US$ 421.22 million from $266.25 million in 2001.
The Asia-Pacific region had a late start in WLAN deployment because of the region’s tendency to be a “me-too player” when it comes to the adoption of leading edge technologies, said Subha Rama, industry analyst for enterprise communications at the Silicon Valley, California-based market research and consultancy firm during a conference call for Asian press on Thursday. Also, WLAN deployments were delayed as information technology deployments in enterprises were reconsidered because of the bleak economic outlook, Rama added.
Asia is however making up for its slow start. “WLAN has already effectively served as an alternative to wired networks, as seen in countries like Japan, which constitutes about 61 per cent of today’s market,” Rama said. The WLAN market in the Asia Pacific region is forecast by Frost & Sullivan to grow at a compound annual growth rate (CAGR) of 23.5 per cent by revenue and 30.4 per cent in units between 2002 and 2009, with revenue in 2009 to reach $1.84 billion.
The upswing in the WLAN market in the region was particularly evident in the second half of 2002, when telecom carriers began to move aggressively to set up WLAN public hotspots in countries like Australia and Singapore, according to Frost & Sullivan. WLAN equipment revenue is expected to grow 63.9 per cent in 2003 mainly on account of increased activity from Internet service providers (ISPs). The enterprise sector is also expected to implement WLANs because of new applications such as voice-over-WLAN, and as mobile workers extend the usage of WLANs beyond plain e-mail and personal information messaging to the ability to access complex databases and order entry, according to Rama.
Countries that had advanced broadband infrastructure such as Japan, South Korea, and Taiwan are at the forefront of WLAN adoption, according to the Frost & Sullivan report. In Hong Kong, WLAN proliferation was driven by carriers, primarily aimed at the SOHO (small office, home office) and enterprise customers, while in Australia, enterprises were the early adopters. In Singapore, both the enterprise and public hot spots were relatively slow starters. Up to 2009, the largest market for WLAN equipment is expected to be Japan, followed by South Korea and Australia.
Some of the emerging drivers for the adoption of WLAN in Asia are the recognition that WLAN has the potential to move beyond horizontal applications to a tool for enhancing employee productivity; the establishment of the 802.11b WLAN technology as a reliable and tested standard; and an increase in the number of hotspots as carriers begin to view WLAN services as a profitable business proposition, according to Frost & Sullivan.
“In countries such as Korea and Japan, carriers have already taken the initiative to integrate other wireless technologies like CDMA (Code Division Multiple Access) and GPRS (General Packet Radio Service) with WLAN to offer seamless wireless connectivity to consumers,” Rama said.
The 802.11b specification is expected to be the dominant WLAN standard in Asia for both the service provider and enterprise segment in the near term, at least for the next two years, with some pockets of other WLAN standards such as 802.11a and 802.11g, according to Rama. WLAN systems conforming to the 802.11b standard carry data at up to 11M bits per second in the 2.4GHz frequency band, while 802.11a allows for data transmission at up to 54M bps in the 5GHz band. 802.11g offers 54M bps in the 2.4 GHz frequency.
Even by 2004, 802.11b is expected to account for at least 70 per cent of the total WLAN market in the region, according to Rama.
“Asia-Pacific is a highly price sensitive market, and enterprises will be worried about protecting their legacy investments (in 802.11b)” added Rama. In that event, the more expensive 802.11a WLANs will be relegated to niche applications in select enterprises that are not price sensitive and want to run bandwidth intensive applications, according to Rama. Public hotspots too are primarily implementing 802.11b, with few instances of 802.11a implementations, Rama added.
The longer it takes for 802.11a to generate market interest, it will be advantageous for WLANs using the 802.11g standard which will gain momentum in select markets, as 802.11g offers 802.11a speeds at near 802.11b prices, according to Rama. The introduction of embedded chipsets is also expected to lead to the phasing out of NICs, particularly with Intel Corp. in Santa Clara, California, getting into this market, Rama added.
