Wireless LANs reach out: Standard is lowering prices and increasing functionality

The wireless LAN market may be set to take off now that a number of trends are converging and a standard-which has been years in the making-has finally been set.

"The industry is at a point now where it is ready to show some tremendous growth," said Mack Sullivan, director of the Wireless LAN Alliance. WLANA estimates the U.S. wireless LAN market last year reached $325 million. The market may reach $800 million by 2001, according to a study by Cahners In-Stat Group.

Vendors are working toward full compliance with the standard, which industry observers say is already beginning to drive prices down and enhance functionality.

The growing use of mobile computing devices, combined with the trend toward data access, will establish a strong future market for wireless LAN products, Sullivan said.

The amount of data traffic in the telephony market grew from 10% in 1991 to 50% last year, said Hatim Zaghloul, president and CEO of WiLAN.

With wireless LAN technology offering increasing data speeds, Zaghloul envisions an array of uses for wireless LANs, some of which could encroach on mass-market applications planned by mobile wireless data operators. His ideas include restaurants or stadiums offering customers use of their LANs. "Then the cooperative networks concept grows fast," he said.

WiLAN has agreed to license its patented wideband orthogonal frequency division multiplexing technology, which complies with the wireless LAN standard.

Although the initial costs of implementing wireless LAN infrastructure may appear daunting to some companies, added capabilities make the investment seem more economical. "The more applications that are available to a wireless LAN, the easier it is for a company to justify the cost," Sullivan said. Access points that can seamlessly transfer connections must be placed along the wired LAN in a building.

One company, Symbol, offers a product that merges voice with data so users can operate essentially a cordless phone and a data device using the same wireless LAN network. Such an application could also compete with wireless voice carriers that offer in-building systems to businesses.

In fact, the Cahners In-Stat study shows that more businesses are planning to use wireless LANs in the future for data communications than private radio networks, cellular digital packet data or PCS networks (see figure).

Beyond the commercial markets, some companies, including Proxim, are targeting home computer users. Proxim's Symphony, designed for homes or small offices, allows multiple home computers to share not only peripherals such as printers but also Internet connections.

However, the universe of homes with more than one computer may be small, said Becky Diercks, senior director of telecom and wireless research for Cahners In-Stat Group. "Now you're looking at a very elite group of users. It's not for a mass audience," she said. The small business market might offer more potential.

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