Which Wireless Technologies Will Provide Component Manufacturers With Prolonged Profits? A Comprehensive New Study by WTRS

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New WTRS research forecasts integration of as many wireless protocols as possible into one chipset and thus one device. One chipset, one device, one huge profit potential.

WTRS new research forecasts integration of as many wireless protocols as possible into one chipset and thus one device. This is driven in part by semiconductor companies responding to the constant commoditization of chips and elimination of margins by attempting to add as much value as possible into a single RF component and thus stave off the inevitable margin erosion. The massive and single-minded effort to integrate all available RF protocols into the same component is also encouraged by regulatory bodies such as the FCC, who envision an opportunity to charge spectrum licenses not just once, but perhaps multiple times.

"Protocols and technologies that compete across more than one wireless application segment, such as CDMA, 802.16e, and the 802.11 family, define an area of intense market growth, corporate R&D investment, and potential generational product opportunities. Those technologies that do not have the wherewithal to cross into additional operational segments may offer near-term ROI but will not provide an RF component manufacturer with prolonged profits. The prime example is Bluetooth, a protocol which promised great market expansion but was confined by its own technical limitations to the Personal Area Network or PAN, and, in spite of efforts on the part of the Bluetooth SIG, has never been able to address a broad usage model and bridge either to the WLAN or wireless sensor arenas," says Kirsten West, PhD, founder and Principal Analyst with the high-tech market research firm WTRS. "At first glance UWB appears to be a good choice for an RF component company. However, consider that the majority of the personal area network functionality of UWB is achieved through WirelessUSB or Wireless 1394, both proprietary trade names driven by large players, including Intel, that force the particular implantation of UWB to remain a Personal Area Network technology. Thus UWB may appear to span three segments, but in fact is an accumulation of at least three distinct implementations which d o not overlap, reducing the impact and earning potential of this technology for component manufacturers. The true opportunity for RF protocols lies in those technologies that straddle two or more wireless segments."

The primary growth areas for wireless components over the next 5 years are Wireless Telecom and Wireless Sensors In the Wireless Telecom segment, key protocols to consider include CDMA (especially cdma2000 1x EV-DO and HSDPA), IEEE 802.11n, and IEEE 802.16e (colloquialized as ‘mobile WiMax’). By contrast, RFID, ZigBee, and IEEE 802.15.4 are the standard protocols likely to dominate the Wireless Sensor segment over the next 10 years. In fact, additional cross-over between RFID and ZigBee, as well as possible inclusion of the IEEE 802.15.4a low data rate with location specification into a coming evolution of ZigBee, create a tangled yet very powerful scenario for wireless sensor standards. The recent study from WTRS finds that IEEE 802.15.4 components in the wireless sensor sector will achieve annual shipments of 390 million by 2011 with a CAGR of 132% over the 2005 to 2011 period. In the same sector, competitive UWB wireless sensor components are forecast to reach more than 20 million units shipped annually in the same timeframe. While these technology choices may both appear to be good investments for a company, IEEE 802.15.4 components are applicable across a wider range of applications.

WTRS has also found that:

1. Based on the analysis of competing technologies by segment, combined with the results of WTRS market forecasts, this study defines two areas of key activity for RF component companies and those participants downstream the channel. These are Wireless Telecom, where the decisions made as to integration of various RF technologies in handsets will potentially impact all wireless, and Wireless Sensors which is an area without bound in terms of market size.

2. The wireless telecommunications industry has been rife with global fragmentation and cross-vendor inoperabilities. As technologies allow communications to achieve the full expansion of its ideal, the wireless protocols and technologies adopted by the mobile handsets of tomorrow become critical to the future overall communications network.

3. While mobile WiMax, or IEEE 802.16e, promises to be a big market, it is faced with stiff competition from upgrades to existing installed options such as EDVO and eventually UMTS.

4. Many barriers exist to the widespread adoption of a to-be-defined 4G or Next Generation Network (NGN) environment. There is an inherent conflict between service companies that were previously offering orthogonal services, now capable of offering a full suite of communications services into the home, the mobile network, or office.

5. Wireless Connectivity is truly the focus of nearly every large OEM today. With the increased capabilities of controllers and RF chips, combined with the advances in manufacturing process techniques that have driven costs down, the notion of ‘wireless everywhere’ is within reach. The IEEE 802.11 family of specifications has advanced to the point of migrating a once quirky solution to real competition to wired broadband.

6. The user navigation and input technologies for phones have not kept pace with the grand scale of new feature integration. Thus, consumers may find themselves frustrated by the awkward interface that separates them from the service they actually want to use. This is an aspect of potential 3G adoption issues that may be readily addressed by the hardware companies. The market-limiting hurdles placed by service providers are, for the most part, out of the control of the hardware manufacturers. Thus if 3G handset sales do not meet expectations, it may not be a simple hardware or software feature issue, but rather a lack of understanding of service price points and bundling on the part of the carriers.

The Comprehensive Wireless Technology Market Report (#WT071307CWMR) examines the overall addressable market for home sensor-controller applications and evaluates the primary wireless technologies and protocols in place today , as well as those emerging through the standardization process. A business case study compares total addressable market for Insteon, as well as those of ZigBee, Z-Wave, X-10, and UPB. Five-year chipset shipment forecasts for each wireless technology included in the report are presented by addressable application. Five-year revenue forecasts by specific technology application area are also included. The report includes analysis of each wireless technology, associated standard, relevant patent activity, and an evaluation of market drivers.


Title: Comprehensive Wireless Technology Market Review

Potential Services: WTRS Wireless Sensor & Control Market Tracking Service

WTRS Wireless Connectivity Market Tracking Service

WTRS WiMAX Market Tracking Service

Product Number: WT071307CWMR

Publication Date: July 2006

Number of Pages: 197

Market Brief, Table of Contents, Figures & Tables all available upon request

Sign up online at http://www.wtrs.net to receive email Market Alerts on this, and the Wireless Weekly Newsletter: "Heard on the Wire at WTRS"

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Market Research from WTRS

West Technology Research Solutions, LLC (WTRS) is an independent market research and consulting company with 8 years in wireless research specializing in Insteon, ZigBee, UWB, Bluetooth, WiMAX, IEEE 802.15.4, Wi-Fi, and other emerging wireless technologies and protocols. WTRS helps companies track the market potential & viability of wireless emerging technologies. WTRS reports are not funded by, or in any other way influenced by, companies which we study. WTRS market research and consulting services provide customers with the information they need to assess market opportunities, evaluate investments, monitor competition, form relationships, and make crucial business decisions in following cutting-edge technologies. WTRS customers range from start-ups, some still in development, to the largest and most prominent players in technology. All have an interest in market intelligence that aides them in making crucial business decisions.

Website: http://www.wtrs.net

West Technology Research Solutions, LLC

Kirsten West

Principal Analyst

phone: 650-940-1196

West Technology Research Solutions, LLC


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