SQUAW VALLEY, Calif. Prices for 802.11 chips and gear are dropping rapidly as the number of public wireless LAN hotspots are rising, but the technology has yet to gain critical mass either for consumers or carriers, according to executives at the annual Telecosm conference here.
Average selling prices for Wi-Fi chips will be slashed in half to $8 this year, $4 next year and as little as $2 in 2006, predicted Sky Dayton, chief executive of Boingo Wireless, a startup trying to establish the underpinnings of an 802.11 roaming service. The company now has deals with 2,600 hotspot operators, he said.
In a panel discussion, Dayton estimated there are now 5,000 hotspots in the U.S., a number that must double in key areas such as airports, hotels and conference centers to get Wi-Fi to critical mass. "We're working with OEMs to create a hotspot-in-a-box that will have access points and everything you need for well under $200," he added.
Intel Corp. president Paul Otellini reiterated Intel's support for 802.11 that is now integrated it in all its Centrino notebook chip sets. "We are jumping in front of the parade," said Otellini, However, "Wi-Fi is in danger of being overhyped and to some degree we may be guilty of that by spending hundreds of millions of dollars on our Centrino advertising campaign," he added.
Nevertheless, Otellini added that Intel is mandating wireless connectivity in all its new buildings. "It's the cheapest way of connecting, and I believe other people see this too," he said.
Whether 802.11 will be integrated in next-generation cellphones was a source of some debate among panelists. "I believe Wi-Fi will become a standard component of cellphones in the future," said Dayton.
Paul Jacobs, executive vice president of Qualcomm was less certain. "Basically we are just waiting for the carriers to ask us to put it in the chip sets. I think we'll see the demand for it eventually, and we have already built the cores for it," he said.
"I've seen a market shift in my discussions with carriers in the last 18 months," said Otellini. "They have moved from saying 'heck no,' to seriously considering it," he added.
Jeff Belk, vice president of marketing for Qualcomm argued users will prefer an $80 CDMA card supplying broad geographic coverage with hundreds of kilobits/second of data than going to fixed locations to get 802.11 links. In addition, Wi-Fi's Mbit bandwidth capabilities are choked by slower DSL back-end connections, he added.
Jacobs of Qualcomm said carriers may want to support Wi-Fi links as a way to offload data traffic, potentially lowering infrastructure costs for themselves and long-distance charges for some business users.
"I was in the lobby of this conference center today making a VoIP call over Wi-Fi," said Otellini. "This is happening a whole lot faster than most people thought. And we are working on 802.11 variants that are in the milliamp power range," he added.