WLAN sales enjoy steady growth

Wireless LAN sales continued to grow in the first quarter of 2004, according to reports out this week by two research firms.

Infonetics Research said total global revenue for WLAN hardware hit $696 million in the first quarter of this year, and forecasts it will reach $714 million by the first quarter of 2005.

Meanwhile, Synergy Research Group said sales of WLAN products in the consumer market continued their strong growth, increasing by 9%, while enterprise spending rose 7% compared to the fourth quarter of 2003. Overall, revenue was up 33% from the first quarter of 2003, according to Synergy.

Infonetics reported lower growth rates for the overall WLAN market, just 2% in the first quarter compared to the previous quarter. The research firm forecasts revenue growth will be slow due to increased competition, and predicts unit shipments will be "slow and steady," with growth in the single digits for the next four quarters.

Both firms said WLAN switch vendors, mainly start-ups, grew sharply, as several vendors began volume shipments. Infonetics said shipments of WLAN switch ports increased 158% and revenue grew 121% from the fourth quarter of 2003 to the first quarter of 2004.

These vendors still represent a small fraction of the WLAN infrastructure market, but that's expected to change, partly because of Cisco's recent announcement of a Catalyst 6500 blade that supports WLANs. That news validates the switch concept for the enterprise market, according to Infonetics.

Synergy Research gives Cisco the No. 1 market share among enterprise firms, with nearly 61% growth in the past 12 months. Symbol holds onto the No. 2 spot, but it grew less than 3% during that period. The real surprise has been 3Com, which surged 47% in the past 12 months. Proxim has the No. 4 spot, but actually lost ground, with a 13% drop year-to-year.