Companies fight over faster wireless

Summary:Consumers and businesses are just beginning to adopt the first wireless networking technology. But the battle for the billion-dollar market for networking kits has begun.

LAS VEGAS--While consumers and businesses are just beginning to adopt the first wireless networking technology, tech companies are already fighting over its successor.

At issue is the billion-dollar market for networking kits that connect laptops today, and printers or stereos tomorrow, and wirelessly link them to the Internet.

The wireless connections, first introduced to corporations and schools, have begun to take off in the past few years, spreading to coffee shops, airports and hotels across the country. With prices having dropped in the past year, wireless connections have begun to catch on in homes as well, which could lead to much wider adoption and greater profits for technology makers.

The 802.11b standard has emerged as the leading standard for wireless, bypassing others such as Bluetooth. But now companies are disagreeing on a speedier successor to 802.11b and risk fragmenting the market.

The behind-the-scenes machinations could mean the losers will be consumers frustrated by all the different options, analysts say.

"It's confusing, but most people are just interested in sharing their Internet connection right now, so the first products they buy will work fine," said analyst Kurt Scherf, of market research firm Parks Associates. "But the issue is one or two years from now when they try to connect different networking products together they may not be compatible."

Almost five times faster
At the Comdex Fall 2001 trade show this week, Intel, Cisco Systems, 3Com and Proxim either demonstrated or released new wireless networking technology, based on the 802.11a wireless standard, that runs nearly five times faster than the 802.11b standard.

The 802.11b technology is limited to data transfer rates of 11 megabits per second (mbps). The faster rate will improve the quality of streaming audio and video and provide the extra bandwidth needed for the swapping of big files, a crucial feature for government research labs, for example.

But tech companies, through an industry standards group called the Institute of Electrical and Electronics Engineers (IEEE), are meeting this week to try to hash out a third standard called 802.11g, which supporters claim can match the speed of the 802.11a standard. The difference involves compatibility with 802.11b: 802.11g is compatible, but 802.11a is not. Supporters of 802.11g say the backwards compatibility will allow people with 802.11b to use their old technology.

Two chipmakers--Intersil and Texas Instruments--have fought to have their technology become the 802.11g standard. Tech company executives say the IEEE has ruled out the Texas Instruments proposal, which reached speeds of 22mbps, and is trying to drum up the required number of votes to ratify Intersil's technology, which reaches up to 54mbps. Because of heavy debate, however, the process has been slow, and some technology executives question whether the standard will ever be finalized.

While Cisco and 3Com say they will support a final 802.11g standard, some companies, such as Intel and Proxim, argue that 802.11g is not needed because 802.11a is already available.

"You might see it next year, but it's too little too late," said Jeff Orr, Proxim's home networking product manager.

Although the 802.11b and 802.11a standards are not compatible, they will be able to coexist with upcoming technology that will allow computer users to toggle back and forth between wireless standards, Intel executives say.

The 802.11b and 802.11g standards are compatible because they reside in the crowded 2.4GHz frequency, the same portion of the airwaves that microwave ovens and some cordless phones operate in. A person may not be able to Web surf over a wireless network, however, if they're using the microwave oven or using a cordless phone at the same time. The 802.11a standard operates in the uncrowded 5GHz frequency, where interference is less of a problem.

Consumer electronics companies, such as Philips Electronics, are already planning to build 802.11a support into televisions, DVD players and videocassette recorders, allowing people to play a video in the living room and stream it to a television in the bedroom.

Jumping the gun?
But even before a final decision has been made, Texas Instruments has begun offering its 80211.g technology. The company has signed on Linksys, a market leader in wireless networking kits, and Melco, a popular networking company in Japan, to use its proprietary technology.

Intel executives are miffed at Texas Instruments for signing on wireless equipment makers to use its proprietary standard before the debate has been settled.

"There are a lot of people angry at Texas Instruments for trying to confuse the issue by spreading a proprietary agenda," said Stephen Saltzman, Intel's senior director for wireless LAN products.

Texas Instruments executives, however, argue that it's more important to give consumers a speed boost that is compatible with 802.11b now, rather than make them wait for IEEE to sort out the new 802.11g standard.

"We're not trying to segment the market," said Matt Kurtz, a product marketing manager for Texas Instruments' broadband communications group. "It's just that because there's tons of 802.11b products out there, there's a need for higher data rates. What you are getting is an enhancement" that doesn't cause incompatibility problems.

But Kurtz admits that his 22mbps technology may not be compatible with the future 802.11 standard.

Analysts say the brewing controversy over multiple efforts to speed wireless connections threatens to splinter the growing market and confuse consumers and businesses, which eventually could lead people to buy products that don't work together.

"Customers don't care about standards, but there may be compatibility problems when they start intermingling with other products. It's a potential hornet's nest," said analyst Mike Wolf, of research firm MDR/Instat.

Potential gold mine
Tech companies are passionate over the wireless standards issues because they are all competing in a market that is expected to grow from $1.2 billion in revenue last year to $4.6 billion by 2005, according to a study by MDR/Instat.

Consumers and companies have often been bruised by standards wars. The wrangling over which 56kbps modem standard would prevail led to a confusing market in which consumers had to choose between two overlapping standards, for example. And companies that stand to gain from rewritable DVD players are haggling over the standard, delaying sales in the potentially lucrative segment.

Linksys executives, who are supporting 802.11a technology, have been demonstrating Texas Instruments' 802.11g technology in its Comdex booth. Linksys went into the trade show with plans to release the product early next year, but those plans are on hold because of the standards debate, said Janet Tsao, Linksys' vice president of business development.

On the show floor, many of Linksys' customers and retail stores have told Tsao that they fear the Texas Instruments product will confuse consumers.

"Our key resellers are hesitating," she said. "They're saying, 'My general consumer is going to be confused, especially with 802.11a coming out.'"

Intel's Saltzman said the IEEE standards group is running through several scenarios for 802.11g, such as approving Intersil's proposal or disbanding the whole idea. Texas Instruments' Kurtz said his company has even pitched the idea of a standard that merges both Texas Instruments' and Intersil's proposals.

Executives from Intel, Cisco and 3Com say they will support 802.11g if and when it gets approved.

"Whether that is going to happen is open to debate," said Charles Giancarlo, Cisco's senior vice president and general manager of technology development. "The progress in the committee has been going much more slowly than we thought (it would). You know that 802.11b is so widely deployed and 802.11a is available. If they're not careful, (the technology) will mature and there won't be a lot of interest."

Staff writer Stephen Shankland contributed to this report.

Topics: Wi-Fi, Cisco, Intel

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