Revenue for wireless LAN equipment was flat in 2Q05 due to seasonality, but was up 17 percent year over year. Total worldwide Wi-Fi revenue for 2Q05 was $741.3 million, up from $613 million in 2Q04. Quarter over quarter revenue was up by less than 1%. The market is expected to continue its growth in 3Q05, propelled by back-to-school spending.
Wi-Fi unit shipments showed a 14% gain from 2004, boosted by strong sales to business customers. Some established consumer product vendors are starting to see traction in the business segment with business-class, wireless product shipments. Shipments of business-class products represented close to 8% of D-Link’s WLAN products shipments in 2Q05. Outdoor, die-cast WLAN equipment and managed Access Points (APs) comprised the bulk of D-Link’s shipments to business.
For a more detailed look into this dynamic market place, please see In-Stat’s "2Q 2005 WLAN Market Share Report, " report #IN0501943WL, available online at: http://www.instat.com/catalog/ncatalogue.asp?id=160
- Victoria Fodale - Research Analyst
, E-mail:victoria.fodale@reedbusiness.com
Last week in Keller, Texas, Verizon launched their FiOS TV service. The TV package is very competitive when compared to cable and satellite operators. The basic digital package, which requires a set top box, is $12.95 per month. Their mainstream all-digital package of 180 audio and video channels is $39.95 per month. Additional sports and movie tiers are available, as are 20 HD channels. Subscribers have three set top box options. A standard definition set top box is leased for $3.95 per month, an HD box rents for $9.95 per month and includes HD channels, while the HD DVR box is $12.95 per month.
One issue in the favor of the telcos who plan TV services is the recent rearrangement of many cable tiers. Cable operators have been moving channels out of the analog tier to the digital tier, which is oftentimes more expensive. For example, most cable subscribers cannot get HBO now without subscribing to the digital service.
Verizon plans to launch FiOS TV in six more markets in 2005 where they already have franchises. The communities that have granted franchises to Verizon are Massapequa Park, NY, Keller, TX, Sachse, TX, Westlake, TX, Wylie, TX, Murrieta, CA, Beaumont, CA, Temple Terrace, FL, Manatee County, FL, and Herndon, VA. Verizon is in the process of negotiating over 200 franchises today, which typically take between six to eighteen months to receive.
The need for franchise licenses will determine how quickly Verizon can deploy TV services to the more than three million homes that will be passed by the FTTH FiOS network at the end of 2005. Texas has made statewide franchising a reality and Verizon is hoping other states will do so as well.
Verizon plans to take advantage of the new rules and apply to the Texas Public Utilities Commission soon, so they can begin serving all of the North Texas communities where they are deploying the FiOS network with FiOS TV. They are hoping for TV service penetration of 20 to 25%; however, with good video quality, pricing comparable to satellite TV and the bundling capability of cable TV, their competition should be prepared for a higher percentage of their customers to switch.
Bluetooth has ridden mobile phone popularity and falling chip prices to increasing shipments, achieving the success its supporters had predicted since the standard’s introduction in the late 1990s. Bluetooth penetration has been widespread. However, mobile phones are at the core of Bluetooth’s popularity, representing the majority of Bluetooth-enabled products in 2004. And Bluetooth-enabled mobile phone shipments are expected to more than double in 2005.
Bluetooth-enabled phones are in turn helping Bluetooth penetration into other products. Bluetooth mono headsets are a rapidly growing market, taking advantage of the mobile phone market, as well as HandsFree regulations in automobiles. The newest headset application is stereo headsets, which can be used with mobile phones, but are more specifically targeted at portable digital music player and PC use. Other strong markets for Bluetooth include notebook PCs and PDAs.
Bluetooth is among a number of wireless technologies on the market, some of which will prove to be challengers to Bluetooth. Of special concern should be two standards based on Ultra Wideband (UWB): Wireless USB and Wireless 1394. Though neither standard is currently on the market, both certainly stand in the way of potentially lucrative markets for Bluetooth in PCs, PC peripherals, and consumer electronics (CE). Both standards will offer much higher data rates than Bluetooth, as well as already being familiar standards to PC and CE vendors. Devices with these standards should be available within the next 12 to 18 months.
However, Bluetooth silicon vendors are not standing still in the face of increased competition. The spec for Bluetooth 2.0 + Enhanced Data Rate (EDR) provides for a tripling of Bluetooth 1.1 and 1.2’s data rate, up to 3 Mbps. The spec was officially launched by the Bluetooth Special Interest Group (SIG) in November 2004, and will make an impact in PCs and mobile phones. In addition, in May 2005, the Bluetooth SIG announced it was working with developers of UWB to collaborate on a future high data rate Bluetooth.
Bluetooth-enabled devices should continue their rapid growth. According to the recently released In-Stat report, "Bluetooth 2005: The Future is Here, " Bluetooth-enabled devices are expected to increase from 316 million units in 2005 to 866 million in 2009. This in-depth report is available online at: http://www.instat.com/catalog/Ccatalogue.asp?id=161
- Brian O'Rourke - Senior Analyst
, E-mail:borourke@reedbusiness.com
It was announced this week that Intel scored a design win for its next generation cellular processor. Research In Motion (RIM) will use Intel’s Micro Signal and XScale architectures combined in Intel’s PXA9xx cellular processor codenamed "Hermon " for next generation BlackBerry devices that will run on high-speed EDGE networks.
This is the first real communications processor design win Intel has had with a mainstream handheld communications provider. So, is this significant for Intel? Absolutely! Unless RIM scraps the project for some reason, this should guarantee Intel the volume it has lacked thus far. It also marks a foothold into the arena dominated by other semiconductor vendors, such as Freescale and TI. Intel's solution provides similar functionality to that from other vendors. Typically, the big difference is architecture. There may also be minor differences in performance, feature sets, and power consumption. This design win does not change Intel’s fortunes in the market overnight, but it may represent more opportunity in the communications market in the future. It will definitely keep Intel in the game.
