Wireless LAN market in Europe to hit $350m by 2006

While wireless local area network (LAN) technology was once thought of as being a costly, low-performance technology, new advances in technology will make it a $US350.3 million market in Europe by 2006, according to a new study released yesterday.

The main drive behind the increase in value in the wireless LAN market will be the entry of major industry players, including Compaq Computer, 3Com and Nokia into the market, according to market research company Frost & Sullivan, the UK branch of US-based Frost & Sullivan.

The wireless LAN market is currently valued at $120.1 million in Europe, according to the study, but the introduction of 11M-bps (bits per second) direct sequence products will push the market deeper into the mainstream. Direct sequence products are faster than products based on other wireless technologies.

But the European market still has a long way to go before it catches up with the US. "The US is quite a bit more advanced; wireless LAN products have come out a lot faster and dropped in price faster," Jan ten Sythoff, UK-based Industry Analyst at Frost & Sullivan said. "There are also more homes with two or more PCs," he added.

Direct sequence (DS) technology, currently the dominant standard in wireless LAN, will continue as the industry standard, while frequency hopping (FH) technology is at risk of being squeezed out of key markets by being sandwiched between DS products and low-end wireless technologies, such as the Bluetooth standard, the study concluded.

"DS is more expensive, but the key difference between DS and FH is that DS can reach 11M-bps, while FH can only reach about 3M-bps," Sythoff said. He added that almost all the major players, including Cisco Systems and L.M. Ericsson Telephone, have adopted DS technology.

The most significant trend in the wireless LAN market is the 5GHz sector, which currently holds 0.9 percent of the market. By 2006, 43 percent of the market will be using 5GHz technology, mainly because of integration with personal area networks (PAN) and wide area networks (WAN), according to Frost & Sullivan.

The largest regional markets for wireless LAN technology are Germany, the UK and France, which account for nearly 60 percent of the total European market, while the markets displaying the most growth and the highest rate of embracing mobile technologies are the UK and Scandinavia.

France and Spain bring up the other end as the two countries which have been extremely slow in letting new products go to market. Much of the holdup is that the 2.5GHz band is currently used by the military in some countries. The government does not allow 5GHz systems to be distributed in the UK, probably for the same reason, Sythoff said.

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