Internet appliances (IA) face a bumpy road even as devices mature
and re-focus. New Tablet PCs have been introduced to take on the
corporate market. Allied Business Intelligence (ABI) projects
the IA market value to increase to $14 billion in 2002, up from
$13 billion in 2001. Over the longer term, the IA market is forecast
to grow to $32 billion by 2007.
Many devices in the IA market suffered from misdirected marketing
at the outset. As vendors try to re-position products to compliment
PCs in the home rather than replace them, their acceptance and
use will catch on. Microsofts Tablet PC re-invents penbased
computing in the workplace and may be the needed boost in the
arm to lagging PC sales. Wireless solutions will gain attention
as broadband access becomes more widespread. Although IA devices
will experience faster growth rates, they will not overtake PC
shipments over the forecast period.
"Microsoft's commitment to the Tablet PC will bring mobile
computing to a new class of corporate users. These corridor warriors
will account for revenues of nearly $10 billion by 2007"
said Laraine Tunick, Analyst and report author. "However,
handwriting recognition and form factor issues will need to be
addressed in future releases after road testing. The Tablet PC
will also have to fend off advances being made by personal digital
assistants (PDA) as devices with mobile and wireless functionalities
Wi-Fi IC Shipments Set To Top Expectations
Driven by strong growth in the SOHO/retail market
segment and broader global demand for 802.11x based wireless
local area network (WLAN) solutions, shipments of chipsets are
set to hit 23 to 25 million units this year, up from 7.9 million
in 2001. This is considerably above initial expectations for
14-15 million chipsets, and it points towards an acceleration
in catalysts driving Wi-Fi adoption.
Taking into account rapid price declines of ICs,
a growing confidence in new addressable markets and the immense
interest in 802.11 technology Allied Business Intelligences
(ABI) new forecasts indicate that between 2002 and 2007 Wi-Fi
chipset shipments are set to grow at a CAGR of 43%. Hence by
2007 shipments will reach 147.5 million chipsets, with revenues
of $1.13 billion.
"There is a very elastic relationship between
pricing and demand in the wireless LAN market, and every step
down in prices brings the industry closer to unlocking new opportunities
and applications," said John Chang, ABI Senior Analyst.
"There is fierce competitive innovation in this market
and it is critical for market participants to commit significant
resources if they hope to compete successfully against the likes
of Intersil and Intel, whose Calexico dual-band 802.11a/b offering
will ship in 2003."
Slowly but Surely: Wireless Networks of All Types, including
WLAN, Bluetooth, UWB and RFID will Permeate Society
Wireless networks of varying types, capabilities
and ranges are slowly pervading society. Advanced 2.5G and 3G
cellular networks are only the beginning as other technologies,
including wireless local area networks (WLAN), Bluetooth, radio
frequency identification (RFID) and even ultra wideband (UWB)
networks are deployed. Cumulative revenues garnered through
the global adoption of these technologies, excluding cellular,
will likely exceed $33 billion by 2007, according to Allied
Business Intelligence (ABI).
Wireless technologies, nearly ubiquitous for voice
communications, will begin to penetrate new applications and
platforms, including industrial management and transportation.
Radio Frequency Identification (RFID), for example, is now poised
to revolutionize supply chain management through its ability
to remotely identify crates, boxes and even individual items
through "smartlabels." ABI research indicates that
these applications represent merely 1% of total RFID transponder
shipments today, increasing to represent about 46% of all shipments
Even the family car will be wirelessly enabled.
"By 2007, Bluetooth and WLAN nodes will be common features
for the automotive platform. Initially geared towards telephony
applications, Bluetooth nodes will soon serve additional functions,
including remote vehicle diagnostics," according to Frank
Viquez, Director of Automotive Technologies at ABI. The industry
research firm expects 19% of all vehicles to become equipped
with Bluetooth by 2007.
Much of the information collected by these so-called
personal area networks (PAN) will still rely upon the widely
available cellular networks. "The 2.5G and 3G networks
will bridge the gap between the localized PAN and the broader
Internet. All of these wireless technologies will be codependent
upon each other," says Edward Rerisi, Director of Wireless
Research at ABI. "In a sense, these various network configurations
will feed demand for the other segments," adds Mr. Rerisi.
Smartphones Will Dominate Wireless Handset
Market By 2008
A migration trend is emerging among wireless users
toward feature rich devices that incorporate color screens and
advanced data and messaging applications, including navigation,
multimedia messaging (MMS), and instant messaging, among others.
The primary catalysts of this trend are a combination
of factors. For one, wireless handset penetration continues
to grow, moving the market from one characterized by initial
penetration to that of replacement with next generation devices.
Secondly, wireless operators are under increased pressure to
drive higher average revenue per subscriber (ARPU) and are doing
so by adding data services and "infotainment" content
available to newer technology handsets.
"With handset makers and wireless operators
developing new devices and compelling services, the replacement
cycle will shorten, accelerating growth in the handset,"
states Kenil Vora, an analyst with ABI. "Key to maintaining
this growth is the successful deployment - and timing - of feature-rich
devices and related services."
Inside The Numbers
According to a study by Allied Business Intelligence (ABI) the
number of replacement handsets shipped will grow from 211 million
in 2002 to 591 million units in 2008, representing nearly 85%
of all shipments worldwide at that time.