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Interoperability, thin APs to grow WLAN market

A new IDC research report shows that the enterprise WLAN market was down marginally last quarter, but tight competition could mean more interoperability for customers.

According to the results of a new International Data Corp. research report, the enterprise wireless LAN equipment market declined slightly in the fourth quarter of 2004, but one analyst pinpoints important market dynamics that are continuing to drive growth.

IDC's "Worldwide WLAN 4Q04 Market Share Update" defines the WLAN market as access points (APs), switches and network interface cards. The report divides the AP market by consumer and enterprise infrastructure spending. According to IDC, the enterprise equipment market decreased 5% in revenue and 10% in shipments from October to December 2004.

Jean Kaplan, associate research analyst with the Framingham, Mass.-based research group, said the decline was to be expected as there are often enterprise budgetary issues at the end of the year that cause companies to delay WLAN implementations.

Kaplan said Cisco Systems Inc. topped the vendor rankings with a 61% market share, and its revenues and shipments remained essentially unchanged quarter-over-quarter.

Symbol Technologies Inc. is next on the list with 11% of market, Kaplan said, but it's not necessarily a strong No. 2.

"They're not doing as well -- in terms of growth -- as could be hoped; they're fluctuating," Kaplan said. "Cisco is the only one in the market that sells consistently high and doesn't fluctuate."

While some of the midsized market players absorbed some of the loss, Kaplan said there were no major changes in the competitive landscape from that of last quarter. However, according to Kaplan, Proxim Corp. was an exception because it regressed after strong third-quarter gains.

Even though market growth stumbled, Kaplan said there is a vendor willingness to provide more interoperability than in the past. Kaplan said this willingness is a result of various vendors' offerings that are vendor AP agnostic -- such as Bluesocket Inc. -- and centralize authentication and security features, Kaplan said.

Kaplan added, "Several other vendors are now beginning to offer the same kind of management philosophy in their switches."

Kaplan said another development that will have an effect on the market is Cisco's acquisition of Airespace Inc. This purchase, according to Kaplan, allowed Cisco to validate its thin -- or independent -- access point architecture as a viable option in the market. Kaplan indicated a key dynamic to focus on in the upcoming quarters is how those product lines integrate and restructure.

The report found that standalone, or "fat" AP, enterprise shipments and revenue decreased, while thin APs and switches defied the market, showed marginal growth and continued to gain over the fat AP architecture.

However, Kaplan said, it is undetermined at this time how the thin versus fat AP dynamic and Cisco acquisition of Airespace will affect the market going forward. Still, IDC projects the market's consistent long-term growth to continue.

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