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Industry News

The Commercial Market

November 1, 2001
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The Commercial Market


WLAN Vendors Search for New Ways to Increase Profits

According to Cahners In-Stat Group, with the recent excitement over the WLAN market, it has been assumed that growing revenues would accompany strong growth in shipments. But prices were never expected to fall as fast as they have for Wi-Fi (IEEE 802-11b) products. Vendors are dismayed by small margins, especially on NICs. Although the cards are shipping in high volumes, vendors are looking for ways to charge premiums on their products.

What caused such a rapid commoditization of the Wi-Fi market? A number of low cost, high volume vendors have established themselves in the 802-11b market, including Linksys, D-Link, Buffalo, SMC and Netgear. These vendors are accustomed to targeting the home/SOHO environments, as well as the small business environment with large volumes at very small margins. The Wi-Fi market has over 40 players and price erosion is rampant.

Vendors are scrambling to add premium to WLAN products, as well as relying on next generation WLAN technologies to bring margins up in the short run. Vendors are trying to differentiate their products by:

  • Building in added security features.
  • Putting quality of service (QoS) features on WLAN products targeted to the home.
  • Adding simpler installation software to home and small business products
  • Adding richer set-up, configuration and management features to enterprise products.
  • Developing hardware that eases technology migration anxiety.
  • Offering access points with built-in functionality to the home.
  • Offering dual mode cards.

For further information, e-mail Gemma Paulo at gpaulo@instat.com.


Airspan Networks Extend Agreement with Bell Telecom to Deploy Wireless DSL in the Philippines

Airspan Networks Inc., a leading worldwide provider of fixed wireless DSL networks, announced that it has extended its agreement with Bell Telecommunications Philippines, a full service telephone company in the Philippines, whereby, BellTel will deploy Airspan's PacketDrive technology to provide wireless voice, high speed Internet access and virtual private networks (WPNs) throughout the metropolitan Manila area.

PackDrive, a major technology enhancement of Airspan's AS4000 wireless DSL platform, provides initial speeds of 512 kbit/s. BellTel Philippines already had deployed the Airspan AS4000 wireless DSL system for the provisioning of voice and clear channel leased lines and Internet access.

Utilizing Airspan's wireless DSL system, BellTel's "i-direct" broadband service targets the high end residential and diverse business markets.

"We are excited to be expanding our range of wireless services to include wireless DSL," said Edgardo Reyes, chairman and CEO of BellTel. "Airspan's PacketDrive is uniquely suited for our small-to-medium business customers and offers an alternative that is not only affordable, but which also allows us to bundle voice and IP services using one customer terminal. Telecom now has the most expansive broadband network covering the Greater Metro Manila area. With the launch of 'i-Direct,' using Airspan's PacketDrive technology, we are ushering in the next generation of communications for the Market."

"The Philippines market has long been underserved in its state-of-the-art, all digital, communications needs," added Reyes. "Broadband connectivity is essential for it to progress in terms of productivity and revenues. BellTel addresses this with 'i-Direct,' which provides a robust productivity platform with its bundled services."

BellTel has projected that there will be five million users in the Philippines by 2005, of which it is estimated that 20 percent, or one million users, will be utilizing broadband services. Growth in broadband services to the home and business in the Philippines mirrors that of the broader Asia-Pacific region.

For further information, contact: Al Quintana, Airspan Networks (954) 851-1665.


MEMS Gaining Momentum in Optical Networking

Despite the recent market downturn, micro-electro-mechanical systems (MEMS) technology remains an oasis within the telecommunications industry, according to Cahners In-Stat Group. MEMS will play a key role in providing the advanced components needed to get the most out of telecom carriers' fiber optic cable investments. As a result, sales of MEMS for use in optical networking will rise from $67 M in 2001 to $2.3 B in 2005.

"Although we have seen layoffs, funding mishaps and scaled-back business plans among some MEMS manufacturers targeting the optical network segment, MEMS as a whole has not been impacted as significantly as the greater telecom market," says Marlene Bourne, a senior analyst with In-Stat. In fact, VCs (venture capitalists) are still providing significant levels of equity to MEMS firms, customers continue to be enthusiastic in their evaluations, and more companies are moving toward production ramp-up. "More significantly, new applications for MEMS in optical networking have come to the fore," says Bourne. MEMS-based variable optical attenuators, tunable filters and tunable lasers have expanded the market beyond switches, providing additional revenue streams within the telecom sector. Market movement is expected to begin in the fourth quarter of 2001, with increased momentum in early 2002.

In-Stat has also found that:

  • While the primary focus of MEMS components continues to be the backbone and the MAN (metro area network), companies are now beginning to take a look at the LAN (local area network).
  • Although the telecom market will not boom like it did for the past several years, smaller segments such as the MAN will experience rapid growth, with MEMS solutions being a significant factor.
  • VCs have provided more money to MEMS companies in the first half of 2001 than they did during all of 2000.

The report, "MEMS and Optical Networks: Oasis or Mirage," examines the changes that have occurred over the past year in regard to the use of MEMS in optical networking. It analyzes the current telecom slowdown and its impact on MEMS development, and compares the increasingly diverse array of solutions and discusses how and when we can expect this market to really take off. The report includes profiles of key players, and forecasts product unit sales and revenues through 2005. For more information, please visit http://www.instat.com/catalog/cat-esa.htm#ea0106mf or contact: Erin McKeighan (480) 609-4551.


Space System/Loral to Build Digital Satellite for Mobile Broadcasting Corp.

Space System/Loral, a subsidiary of Loral Space and Communications, has received an authorization to proceed (ATP) from Mobile Broadcasting Corp. (MBC) of Japan to design and build MBSAT, a satellite that will deliver digital multimedia information services such as CD-quality audio, MPEG-4 video and data to mobile users throughout Japan. On-orbit delivery of the spacecraft is scheduled for fourth quarter 2003 with service expected to begin in early 2004.

The MBC services are the first in the world to deliver not only high quality music but also video and data to mobile users through various kinds of mobile receiver terminals including those in cars, ships, trains, handheld terminals, personal digital assistants (PDAs), cellular phones and home portables. A very small antenna will be sufficient to receive MBC broadcasting signals even inside office buildings and in vehicles moving at high speed. MBC will supplement their satellite service with terrestrial signal repeaters.

For more information, contact: John McCarthy, Loral Space and Communications (212) 338-5345.

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