802.11n ratification will drive down wireless LAN prices

With 802.11n ratification and a higher volume of sales, wireless LAN prices are about to drop. Aruba Networks is first to market with its new low-cost AP-105 access point, but others are sure to follow.

Enterprise network managers will discover that prices for 802.11n wireless LAN technology will be dropping significantly, now that the IEEE has finally ratified the standard.

In their recent research note on the 802.11n ratification news, Gartner Inc. analysts Tim Zimmerman and Michael King predicted that list prices for 802.11n products will fall by 20% to 30% over the next six months.

Indeed, Aruba Networks Inc., the number two vendor in the enterprise wireless LAN market, has fired the first shot in the coming 802.11n price war. Today it unveiled its new AP-105 802.11n access point with a list price of $695, a significantly cheaper product than Aruba's existing 802.11n access points, the AP-120 series, which starts at $1,295.

"802.11n deployments have taken off to an extent that there is enough volume purchases on these chipsets so that prices have fallen on [access point] components. That's a big reason why we were able to lower the price on this," said Jon Green, director of product marketing for Aruba Networks.

Aruba's AP-105 doesn't replace its existing 802.11n access points. Instead, the company envisions the AP-105 as a high volume, economically-priced alternative to its flagship AP-124 and AP-125 802.11n access points. Yet Aruba expects the AP-105 to become its top-selling access point, eventually replacing sales of the company's 802.11a/b/g products.

The AP-105 has most of the features that Aruba's higher end AP-124/125 access points have, but some of the hardware capabilities have been scaled back to achieve a lower price. For instance, it has 2x2 MIMO instead of the AP-124/125's 3x3 MIMO. The AP-105 also has only a single Gigabit Ethernet port, instead of two. Some enterprises prefer access points with two ports because this allows them to put multiple APs in a room that might have only one network cable drop. Having two ports also allows enterprises to run a redundant network connection to each AP. The new access point won't support external antenna connections and it has a slightly slower CPU than its AP-124/125 cousins, meaning that it isn't ideal for mesh networks.

In addition to the low price for the Aruba AP-105, Green hinted that the company will be cutting the price for its higher-end 802.11n access points, which start at $1,295. "We're looking at what to do with that," he said.

More on wireless LAN and 802.11n
How to plan for 802.11n wireless LAN upgrades

Deploying 802.11n access points: Best practices

802.11n ratification planned for Sept., draft products to interoperate

Let the 802.11n price wars begin

Aruba won't be the last vendor to bring lower 802.11n prices to the market, said Paul DeBeasi, senior analyst with Burton Group.

"Over the next 12 months you'll see a lot of other vendors come to market with low prices and those high-margin, low-volume access points are going to disappear. What Aruba is doing [with its price] isn't gimmicky," DeBeasi said. "There is no sacrifice on margins with that price point. A lot of the cost of 802.11n is attributed to the board design and chipset, and that cost is being driven down by volume. You can't get away from that. The manufacturing cost goes down when the volume goes up. Cisco is going to take advantage of that as well. They're probably going to more aggressively move to the next-generation silicon as well."

Post 802.11n ratification: Cash for clunkers

In the meantime, some vendors are trying to capitalize on the 802.11n ratification in the short-term by offering marketing gimmicks to increase sales of 802.11n access points. Both Meru Networks and Meraki have introduced "cash for clunker" programs, where customers can trade in their legacy wireless LAN infrastructure and get a rebate on new 802.11n products.

Cisco Systems Inc. is offering something along the same line with its Cisco Technology Migration Program (CTMP).

"A customer who is looking to trade in their older Cisco product or competitive product can receive a discount off their new purchase [with CTMP]," said Chris Kozup, Cisco's manager of wireless and mobility markets. "Previously that discount was at 10% for 802.11n trade-ins. We've increased that to 15%."

Kozup wouldn't comment, however, on whether Cisco would introduce a low-cost access point or drop the list prices on its existing 802.11n products. "We feel confident with the product we have on the market today," he said.

Customers itching for 802.11n migration – even without the lower prices

David O'Berry, director of IT systems and services at the South Carolina Department of Probation, Parole and Pardon Services, said he is sure that prices of 802.11n access points across the market will drop eventually, but he isn't going to wait.

"I held off on this long enough," he said. "I could have pulled the trigger and done a full 802.11a/b/g rollout last year, but I held off to make sure we get the full benefits of 802.11n. I know where the technology is going, but you can never tell where the break point is going to be in terms of pricing."

O'Berry is in the midst of rolling out Aerohive Networks' 802.11n access points to 53 sites in order to enable collaboration among the law enforcement officers in his department and other external state agencies.

Network managers shouldn't hold off on migration until the next generation of 802.11 standards comes along. Already the IEEE has a group working on 802.11ac and 802.11ad, two very-high throughput wireless LAN standards that promise Gigabit speeds and multiple users accessing access points simultaneously, but it could be a while before finalization.

"Realistically we're not going to see any pre-standard [802.11ac/ad] products for a few years," DeBeasi said "Plus, the 802.11 standard has capabilities for four transmitters and receivers that you haven't even seen yet. You're going to see more 3x3 and 4x4 [MIMO] devices and you're going to see 1x1 products for handheld devices. You're going to see the whole spectrum of 802.11n products at different price performance levels."

Let us know what you think about the story; email: Shamus McGillicuddy, News Editor

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