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Too much of a good thing?

Posted: 01 Aug 2002 ?? ?Print Version ?Bookmark and Share

Keywords:wlan chips? 802.11a? 802.11b? wi-fi? wireless isp?

Farpoint Group's Craig Mathias observes: As 802.11a survives and prospers, many players won't get a piece of this success. They'll merge, move on, be acquired or bite the dust.

Craig Mathias is a chief analyst with the Farpoint Group.
Just for fun, I recently sat down to add up all the companies building 802.11a chips. I stopped after a few minutes at 24, but industry insiders say the number is likely in excess of 30. Now, far be it for me to discourage innovation and competition. But does the world need 30 companies building 802.11a chips? Clearly not.

Investors and technology producers need to remember that if you build it, they may not come, and you could get left holding a large and very empty bag. This is bad for all of us, since investors who sour on a sector tend to remain that way for some time. Funds dry up, new ideas die on the vine and good people find something else to do.

To be fair, these are the early days of 802.11a. Anything can happen. In fact, I think the market bifurcates in two important directions. Some successful vendors will focus on performance, pushing beyond today's 72Mbps and 108Mbps two-channel hacks to 150Mbps, 200Mbps, and beyond. And some will go after the lucrative low-power space, perhaps sacrificing a bit of throughput to conserve battery life and footprint. Both will continue to push ever-greater levels of device integration. But as 802.11a survives and prospers, many players won't get a piece of this success. They will merge, move on, be acquired or bite the dust. That's just the way it works.

The same phenomenon is at work in the public-space deployment of WLANs. Despite a few bankruptcies and other departures from this space, the field is now bigger than ever. And therein lies a further problem: If all these guys deploy, the three non-overlapping 802.11b channels will be swamped in short order, at least in the key target venues for public WLANs. Will we users have to put up with poor throughput in the name of competition?

I've never been crazy about reselling the unlicensed bands, which were put in place for end users and not utilities or wireless ISPs. Still, to get the most from all those Wi-Fi radios out there, we need to be able to use them in the office, at home and in public spaces. But they're of limited value if interference from all those access points materializes.

The solution might be gulp licensing. How about licensing, as in cellular, two or three for-profit public-space WLANs in specific geographies? No auctions, mind you, just the basic spectrum management the FCC ought to be doing anyway. A simple lottery among qualified players should do the trick. That way we get enough competition to hold down the price and a reasonable guarantee that throughput will be acceptable. It's worth some debate.

Craig Mathias

Chief Analyst

Farpoint Group





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