802.11 NETWORKS GAINING ON PROPRIETARY NETWORKS

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802.11 NETWORKS GAINING ON PROPRIETARY NETWORKS
07 September 2005 - Venture Development Corporation

Led by 802.11b, standardized IEEE 802.11 networks are expected to account for the most significant gains in share among wireless industrial products in North America by 2007. According to a recent VDC study, IEEE 802.11a, b and g networks combined to account for 33.6% of the 2004 North American market for wireless products used in on-site industrial monitoring and control applications. VDC forecasts this share to increase to 41.4% in 2007.

Proprietary protocols operating in the 900 MHz band accounted for the largest share of shipments in 2004, followed by IEEE 802.11b. The two networks combined to account for just over half of shipments and are expected to combine for a similar share in 2007, but with IEEE 802.11b gaining ground. Similar gains in share are also expected for IEEE 802.11a and IEEE 802.11g. Most of these gains will be at the expense of products using proprietary protocols in ISM bands.

Reasons for this shift include:

Lower prices of IEEE 802.11 products compared to most proprietary networks

Standardization of office and plant floor networks

Multiple vendor options

High data throughput

Brand name familiarity from the IT department

Despite the advantages of IEEE 802.11, proprietary networks are often preferred in industrial applications where there is a need for longer transmission distances and bandwidth requirements are not high. There is also the perception that these products provide higher reliability and security.

'The choice between standardized networks like 802.11 and proprietary protocols is largely based on the application requirements,' says VDC analyst Jake Millette. '802.11 is especially useful in applications with shorter transmission distances and high data rate requirements, whereas a proprietary protocol operating in lower frequencies are able to transmit longer distances and through more obstacles, albeit more slowly. Proprietary networks will continue to be used in many applications.' But because of the advantages of each in different applications, Millette notes that many wireless suppliers are expanding their product lines to include both standard and proprietary networks.

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About: Venture Development Corporation
Venture Development Corporation (VDC) is an independent technology market research and strategy consulting firm that specializes in a number of industrial, embedded, defense and niche enterprise IT markets. VDC has been operating since 1971, when graduates of the Harvard Business School and Massachusetts Institute of Technology founded the firm. Today, we employ a talented collection of analysts and consultants who offer a rare combination of expertise in the market research process; experience in technology product and program management, and formal training in engineering and marketing. VDC's clients include thousands of the largest and fastest growing tech suppliers in the world and the most successful investors participating in the markets we cover.

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