Faster wireless LANs may prove a bargain

Even before significantly faster wireless LAN products hit the market, the cost of that equipment is said to be plummeting.

Surprised analysts and vendors are now saying that 54M bit/sec wireless products that support the 802.11a standard, which are scheduled to start shipping by year-end, are likely to be priced close to what existing 11M bit/sec, 802.11b LANs sell for today.

That means about $150 to $200 for client interface cards, and between $700 and $1,400 for access points.

Getting more for less?

Only a few months ago, the newer products were projected to cost nearly double their current counterparts. The shift could trigger big spending in corporate accounts, some analysts say.

"With the lower prices, we can expect very rapid acceleration in wireless LAN sales," says Craig Mathias, a principal with wireless consultancy Farpoint Group. "It's quite remarkable."

Most wireless LANs shipping today are based on the first international wireless standard, IEEE 802.11b, approved in 1999. LANs based on that standard have a maximum 11M bit/sec data rate in the crowded 2.4-GHz radio band.

The 802.11a standard was approved at the same time as 802.11b, but offers five times the speed and uses the nearly empty 5-GHz band in the U.S. and parts of the Pacific Rim. Because the different radios can't communicate with each other, no upgrade is possible, thus leaving users to replace one physical device with another. Chip makers were able to use existing 2.4-GHz technology for 11b chipsets, but had to work from scratch building 11a chipsets, which are just now starting to ship to LAN vendors.

Lower prices alone may not be enough to sell users on the faster equipment, however.

Sears, Roebuck and Co. plans to stick with slower speeds on its 802.11b-compatible in-store wireless networks, which are adequate for current data traffic, a spokeswoman for the company says. "The issue is more than just selecting an alternate standard [such as 802.11a]. Every device, about 30,000 total for Sears, would require a new radio, and there is no business or technical reason to do that."

Other wireless users will take a close look at the price/performance of 802.11a products for new deployments.

"If a 54M-bit/sec access point costs less than an 11M bit/sec or a 2M bit/sec, then we're going to purchase the 54," says Michael Finch, director of mobile solutions for FinTech Solutions, a Calgary, Alberta, systems integrator. But that decision will also hinge on having corresponding 54M bit/sec radios for the handheld clients, at an affordable price. "If the cost of the handhelds was at a premium, we'd probably stay with the 11M bit/sec because the incremental cost for dozens of handhelds would probably outweigh the lower cost of the access points."

FinTech's main wireless vendor is Symbol Technologies, which plans to bring out the faster 802.11a LANs early next year. Finch now expects only a small increase in price for those products compared with current 802.11b products.

Almost none of the 15 to 20 hardware vendors in the wireless LAN market have announced pricing plans, though recently several, such as Symbol and Intermec, have said there will be only a "small price premium" for 802.11a compared with current products. One of the few vendors to give specifics is Proxim, says Gemma Paulo, wireless analyst with Cahners In-Stat.

"Proxim's selling price for a card will be about $195, and for an access point, about $695, which are lower than I expected," she says.

An abundance of features in the 802.11a chips means LAN manufacturers spend less on other components, which drives down the final price. So, too, will fierce competition.

About two dozen vendors are selling 802.11b products, and nearly all have said they'll offer the faster versions late this year and early next year. Farpoint's Mathias says the wireless LAN market was about $1 billion in 2001, most of that 802.11b sales, and is expected to at least double this year.

Offsetting the downward pressure on prices will be efforts by vendors to charge a premium for added features and enhancements, at least for access points. Vendors will offer more expensive rugged or fire-resistant metal housings, instead of plastic, for example, or a range of antenna options, sophisticated power management.

Yet so far, vendors are almost downplaying the significance of much faster wireless networks and much lower prices.

"[The 802.11b standard] will be around for a long time," says Christine Falsetti, a Cisco marketing executive. "We have to work a migration strategy with our customer base to see if 11a is right for them."

But what's not to like? You get cheaper than expected 802.11a wireless products, five times the bandwidth, and plenty of wireless VPNs and firewalls available for beefed-up security. Even the theoretically lower range of 5-GHz radios may not be as much of a problem as first thought. Atheros' Rich Redelfs says most wireless access points are within a 56- to 60-foot radius, which can easily be matched by 802.11a LANs.

"The last argument you can make about wireless LANs - lower performance than wired LANs - will go away," says Farpoint's Mathias. "You'll see very similar performance between 11a LANs and 100M bit/sec wired LANs."

Faster wireless LANs may prove a bargain

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