Gartner Dataquest Says Worldwide Wireless LAN Shipments to Grow 73 Percent in 2002; Report Provides Detailed Breakout of the Market Through 2007.

Business Editors & High-Tech Writers

SAN JOSE, Calif.--(BUSINESS WIRE)--Sept. 19, 2002

While many technology sectors are struggling, the wireless local area network (LAN) industry is poised for double-digit growth.

Worldwide wireless LAN shipments are on pace to grow 73 percent in 2002, while revenue will increase 26 percent, according to Dataquest Inc., a unit of Gartner, Inc. (NYSE: IT and ITB).

The industry will continue this consistent growth in 2003, as worldwide wireless LAN shipments total 26.5 million units, up from 15.5 million units in 2002. Revenue will reach almost $2.8 billion in 2003, up from $2.1 billion in 2002. Gartner analysts said the market will continue to experience healthy growth through 2007.

"The initial strong growth in the wireless LAN equipment market is being driven by the mobile data connectivity needs of professional portable PC users," said Andy Rolfe, principal analyst for Gartner Dataquest's worldwide telecommunications and networking group.

"The increase in wireless LAN-enabled mobile PCs and PDAs will drive demand for wireless LAN access in a variety of locations to support mobile access to business applications," Rolfe said. "These include homes for teleworkers and 'day extenders', public spaces or 'hotspots', and enterprise premises. As wireless LAN equipment prices continue to fall and speed increases, wireless solutions will become a viable alternative to wired LANs in small premises. This is because bandwidth demands are lower in small sites, and the cost of cabling for wired Ethernet is higher than in larger premises."

Gartner Dataquest forecasts the penetration rate of wireless LAN into the professional mobile PC installed base will grow from 9 percent in 2000 to almost 50 percent by the end of 2003, and it is expected to surpass 90 percent by 2007.

Most wireless LANs are currently being purchased as an add-on PC adapter. But, in 2002, approximately 10 percent of all mobile PCs will be shipped with a wireless LAN included, and it will increase to 31 percent in 2004. By 2007, Gartner Dataquest forecasts 68 percent of mobile PCs shipped will include a wireless LAN.

"Already the top-tier mobile PC manufacturers offer portable PCs with bundled wireless adapters," Rolfe said. "In fact, Intel recently announced its intention to incorporate wireless LAN capabilities into the forthcoming Banias mobile platform, which will drive wireless LAN integration in new mobile PCs."

Because the industry has a great deal of potential, many vendors are trying to enter this market. In 2001, there were more than 70 vendors offering wireless LAN equipment, and more vendors are still entering the market.

"The market is already far too crowded, and we expect to see significant failures, withdrawls and consolidation over the next two years," Rolfe said. "By 2005, apart from mobile PC vendors offering bundled or integrated wireless LAN, we do not expect there to be more than 6 or 7 significant adapter vendors. There will be a larger number of infrastructure vendors that survive, due to the greater differentiation in products."

North America is the largest region for wireless LAN shipments, as it's projected to account for 63 percent of shipments in 2002. Gartner Dataquest analysts said other regions will begin to account for a larger portion of the overall market.

"Regulatory restrictions in Europe has delayed adoption, but this issue is now becoming resolved and there is strong demand for mobile computing devices in Asia/Pacific, particularly in Japan," Rolfe said. "This will result in the strongest wireless LAN growth being outside North America and, by 2007, North America is projected to account for 40 percent of shipments while Asia/Pacific and EMEA should have approximately 30 percent of the market."

Additional information is available in the Gartner Dataquest Market Statistics report, "Wireless LAN Equipment: Worldwide, 2001-2007." This report provides a detailed breakout of the worldwide wireless LAN industry for the next five years.

This information is published by Gartner Dataquest's Worldwide Public Network Services research cluster. This service is targeted at incumbent and next generation carriers and ISPs; traditional and emerging equipment manufacturers; and the financial community. More information about the Worldwide Public Network Services research service can be found on the Gartner Web site at http://www.gartner.com/1_researchanalysis/focus/telecom_fa.html.

Additional information on the telecommunications industry will be presented during Gartner Symposium/ITxpo 2002, October 6-11 in Orlando, Florida. Gartner Symposium/ITxpo is the IT industry's largest and most strategic conference, providing business leaders with a look at the future of IT. For more information, please visit www.gartner.com/symposium. Members of the media can register by contacting Maria DiMasi at 212-699-2734, or by e-mail at [e-mail].

To subscribe to Gartner Dataquest programs, please call 408-468-8009. Reports can be purchased on the Internet at www.gartner.com.

Gartner Dataquest is the recognized leader in providing the high technology and financial communities with market intelligence for the telecommunications, semiconductor, computer systems and peripherals, document management, software and services sectors of the global information technology industry.

Gartner, Inc. is a research and advisory firm that helps more than 10,500 clients understand technology and drive business growth. Gartner's businesses consist of Gartner Research, Gartner Consulting, Gartner Measurement and Gartner Events. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, and has 4,000 associates, including 1,200 research analysts and consultants, in more than 90 locations worldwide. Fiscal 2001 revenue totaled $963 million. For more information, visit www.gartner.com.