Whitepaper
5-GHz Wireless LAN – Real Opportunity in a Real Market
February 2002
Volume 2.0
1 Wireless LAN Market – Gaining Momentum
The market for high-speed wireless networks has
arrived. An analysis of reports by Cahners In-Stat
Group and Allied Business Intelligence (ABI) predicts
that worldwide chip set revenue for the 5-GHz wireless
local area network (WLAN) market will reach U.S. $620
million by 2005, with an annual growth rate per year of
158 percent (1). Cost and performance of WLAN
technology has reached acceptable levels, and
standards have arrived that guarantee interoperability
700
600
500
Enterprise
Residential
Public access & other
400
300
200
100
0
2001
2002
2003
2004
2005
Table 1: Wireless LAN 5-GHz IC market 2001 - 2005
among various pieces of equipment. The greatest initial
market potential lies in the enterprise and home
segments. The public sector also offers opportunity but
is expected to grow at a slower rate.
Unlike many sectors of the telecommunications industry,
analysts predict dramatic growth in the demand for
wireless networking equipment in the enterprise and
home markets, and, in particular, 5-GHz WLAN
technology, beginning in 2002:
An analysis of Cahners In-Stat Group and ABI reports
predicts that the enterprise WLAN end-use sales will rise
from U.S. $3.6 billion in 2001 to U.S. $6.8 billion in
2005.(2)
This paper will offer an overview of all three market
segments - enterprise, home and public access followed by a look at current global technology
standards, the evolution path from 2.4-GHz, and the
problems currently facing the industry.
1.1 Enterprise Market Segment
WLAN technology is starting to show a positive enough
return on investment (ROI) to entice corporations into
expanding their network to include a wireless
component. The ROI is based on reduced capital
equipment, installation and management expenditures
coupled with increased employee productivity.
Whether you work in a small suite or in a multicomplex
campus environment, networked connectivity is a
necessity. Wired networks, such as Ethernet, offer
sufficient bandwidth for most applications, but are limited
in their flexibility and ease of installation (i.e., you must
be near a physical data jack and necessary cables to
gain access to the network). By implementing a WLAN
network, enterprise end-users will enjoy increased
productivity and flexibility in their work environment
because they are not being confined to a wired
connection. In a recent report by Sage Research, it was
estimated that, on average, employees can gain as
much as eight hours per week in productivity, or one full
work day, over their wired LAN counterparts,
representing a significant savings in one year (3).
Based on such benefits, companies may decide to
"extend" the coverage of their wired network by adding a
wireless network. To do this they install stationary
devices called Access Points (APs) in strategic locations
where wireless connectivity is valuable, such as in a
conference room. An AP is a connection point between
two parts of a wireless network or between a wired and
wireless network. Whenever end-users are within the
coverage area of one of these APs, they will be able to
connect to the corporate network just as they do with
their wired connection. APs can also be used to create
networks that are completely wireless, thus eliminating
the need for wired connections entirely.
To connect to the WLAN, end-users simply need
network interface cards, such as PC or PCI cards, which
talk to the AP and allow laptops or desktop computers to
connect to the corporate network. These cards will
provide connectivity similar to wired Ethernet cards, but
at a data rate that is as much as five times faster than
conventional 10BaseT systems.
1.2 Home Network Market Segment
At home, consumers have or will have the desire to
connect various information and entertainment devices
to a single point of Internet access. Whether it is
multiple PCs sharing a single dedicated Internet
connection or multiple appliances such as a home
theater system, security system and automation system,
a network is required.
Wired solutions are both
cumbersome and unsightly, and might not be practical in
older homes and apartments.
Using WLAN technology, consumers will be able to
easily and affordably link various information and
entertainment devices to each other in the home. For
1
example, a satellite television receiver on the roof can
connect to the television inside the house via a 5-GHz
WLAN connection. There is no pulling of cables through
new homes or undertaking costly and difficult retrofitting
of older homes. Another example is the capability of a
consumer to review e-mail or search the Web while not
being confined to a study or bedroom with an Ethernet
jack.
Consumers will purchase a gateway or set-top box
through a variety of sales channels including retail
outlets and service providers. The gateway will consist
of a wide area network connection such as DSL, cable
modem, satellite or ISDN, as well as a LAN connection.
There are three primary types of physical connectivity
for the home: existing wiring (telephone and power),
new dedicated cables, or wireless technology. In many
cases, wireless is the most desirable option because it
offers the greatest degree of flexibility and is relatively
cost effective.
Today consumers can purchase wireless network cards
(PC, PCI, etc.) for laptops and desktop PCs based on
the 2.4-GHz 802.11b standard. In addition, makers of
appliances such as telephones (cordless and cellular),
home security systems, home theater equipment,
Internet-enabled refrigerators, and other Internet
appliances will embedhigh-speed wireless technology
into their products to provide connectivity to a gateway
or set-top box.
1.3 Public Area Access Market Segment
Public area access refers to wireless network
connectivity within places such as airports, hotels,
convention centers and subway stations.
Mobile
professionals benefit from an increase in productivity
while away from the office. Service providers or facility
owners install a network of APs within a building, giving
users wireless access to the Internet. The APs are
interconnected via a wired network such as Ethernet,
which in turn connects to the Internet through an edgerouting element. The net result is a sustained wireless
connection to the network as end-users travel between
APs. Devices that have been equipped with wireless
technology, such as mobile phones, personal digital
assistants and laptops, are already available to endusers.
2 5-GHz WLAN - Real Opportunity in a Real
Market
2.1 Technology Standards
A number of technical solutions for high-speed wireless
network markets have been developed throughout the
world,
primarily
in
Europe
(European
Telecommunication Standard Industry - ETSI), Japan
(ARIB) and North America (IEEE).
layers. The only difference lies in 802.11a's Media
Access Control (MAC) layer, which is Ethernet-based.
The HiperLAN2's MAC is similar to Asynchronous
Transfer Mode (ATM), with some additions to support
Ethernet-based applications.
Because HiperLAN2 is based on ATM and IP
technology, it has quality and security functions not yet
available with 802.11a.
Despite these functional
advantages, its more complex and expensive design
makes it a less attractive option. The IEEE 802.11
committee has engaged task groups specifically to meet
European and Japanese technical and market
requirements in areas such as quality of service and
security.
2.2 Evolution to 5-GHz WLAN
There are two primary factors driving the evolution from
2.4 GHz to 5.0 GHz: bandwidth and congestion.
Enterprise customers seeking to implement nextgeneration information technology applications such as
intranet, audio and real-time video applications, as well
as those interested in deploying application service
provider models for the distribution of client software, will
require WLAN solutions offering more bandwidth than is
available with 802.11b.
While the draft 802.11g specification has been touted as
providing performance comparable to 802.11a in the
2.4-GHz band, it is widely believed that it will take
upwards of a year to ratify, and volume production of
802.11g products will not be begin until 2004. In
addition, limitations in key performance areas, such as
network capacity and data throughput in dual mode
802.11g operation may severally limited adoption in the
public and enterprise markets.
In addition, increased congestion in the unlicensed 2.4GHz band, which hosts a variety of wireless applications
including 802.11b WLAN, cordless telephones and
Bluetooth wireless technology as well as home
appliances such as microwaves, is becoming
problematic.
2.3 The Opportunity - High-Volume Production
of 5-GHz WLAN Products
The market for 5-GHz WLAN technology is real, but
challenges remain. OEMs evaluating this space have
suggested that there are three major problems with
current semiconductor solutions.
1. High Power Consumption: OEM customers consider
the power consumption of traditional OFDM modem
solutions to be too high (2.0 watts and higher at 3.3
volts);
The ETSI standard, called HiperLAN2, and the IEEE
802.11a solution use almost identical Orthogonal
Frequency-Division Multiplexing (OFDM) physical
2
2. High Total System Cost: OEM customers consider the
total system bill of material cost of current 802.11a
solutions to be too high;
2 Gemma Paulo Life, Liberty and WLANs: Wireless
Networking Brings Freedom to the Enterprise
November 2001
3. Low System Performance: OEM customers do not
believe that the performance (data rate and range) will
deliver the end-user experience necessary to generate
high demand.
Navin Sabharwal, Wireless LAN Silicon ICs: Market
Dynamics,
Major
Players
and
Technology
Assessments November 2001
These same OEMs have indicated that the silicon
vendor who addresses these issues will make a huge
imp act on the market and will be in a position to lead
the market.
3 Wireless LANs: Improving Productivity and Quality
of Life, Sage Research for Cisco Systems, May 2001
For a more in-depth discussion on the problems facing
this industry, please see the IceFyre whitepaper titled
Achieving Volume Production of 5-GHz WLAN Devices.
For a more in-depth discussion on solutions to these
problems please see the IceFyre whitepaper titled
IceFyre’s 5-GHz OFDM Modem Solution.
3 Summary
The 5-GHz WLAN market is on a growth curve that
provides opportunity to networking equipment and
application OEMs, as well as to component designers
and manufacturers. Driving the market is the end-users'
desire for high-bandwidth network connectivity without
the interference issues of the 2.4-GHz band. There are
some design challenges facing this market, but once
they are solved, the 5-GHz segment is expected to
become the dominant player in WLAN.
References:
1 Gemma Paulo Life, Liberty and WLANs: Wireless
Networking Brings Freedom to the Enterprise
November 2001
Navin Sabharwal, Wireless LAN Silicon ICs: Market
Dynamics,
Major
Players
and
Technology
Assessments November 2001
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© 2002 IceFyre Semiconductor Corporation
February 2002