Wireless LAN set to change consumer electronics, says analyst

TAIPEI, Taiwan — Wireless LAN technology is set to make a major incursion into the consumer electronics space during the next few years, driven primarily by wireless connectivity in game consoles from the likes of Sony and Nintendo and also by the rising popularity of handheld gaming devices.

Although a potpourri of wireless technologies, from Bluetooth and Zigbee to Ultra Wideband and WiMax, are spilling into the marketplace, it will be the maturity and speed of wireless LAN networks that make them the "technology of choice" for consumer electronics makers, said Mario Morales, a semiconductor analyst with market data provider IDC Corp.

"It's going to take some time for some of these other technologies to develop within the consumer electronics space," he said. "So we are a lot more bullish on wireless LAN because the pricing points are getting to a point where you will see some integration" into cost-sensitive CE devices.

During a presentation to a small group of Taiwanese semiconductor executives on Tuesday (Mar. 1), Morales said wireless in consumer electronics will be a big driver of revenue growth for semiconductor suppliers in the next few years. As it goes beyond the PC, it will pop up in home gateways, DVD players, digital TVs and more widely in game consoles.

In 2004, wireless LAN functionality was in only about 1 percent of consumer electronics devices, he said. During the next five years, however, it will blossom as chip makers hit lower price points with low-power chips. IDC expects wireless LAN functionality in consumer electronics to grow to 13 percent of devices by 2008, with about 81 million wireless LAN-enabled devices in the market. That means the consumer segment overall will account for about 21 percent of all semiconductor wireless LAN shipments by 2008.

For game consoles, IDC believes growth will increase from 2 million units in 2004 to 55 million units in 2008. The DVD segment will grow from about 1 million units with wireless LAN functionality this year to about 9 million in 2008. And digital TVs will absorb about 9 million wireless LAN modules by 2008.