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Wireless chips set to boom

Bluetooth will emerge as the winner in the wireless semiconductor market even as the market is on the verge of a spectacular boom, according to a Frost & Sullivan study.
Written by ZDNet Staff, Contributor

A new study by Frost & Sullivan, the international marketing consulting company, predicts a bright future for the suppliers and developers of wireless technology chipsets.

Wireless technology's plummeting costs, versatility and diverse functionality are cited as the reason for the expected boom.

Despite the number of short-term problems, Michael Wall, research analyst at Frost & Sullivan, believes that the short-range wireless communication semiconductor market will fulfill stellar growth predictions.

Issues that need to be addressed are mainly technological, including interoperability, signal interference and qualification process.

Restricted supply of chipsets to smaller product developers may also delay the launch of new innovative applications.

The main beneficiary of the boom in short-range wireless communication semiconductors will be the Bluetooth sector.

Comfortably outperforming the Wireless LAN, HomeRF and DECT sectors, the Bluetooth chipsets industry is set to report global revenues worth of $2.3 billion in 2006. This equates to global shipments of over 956.0 million in the same year.

Cellular phones and mobile computers are in the vanguard of the impending avalanche of Bluetooth-enabled product releases.

As for the Wireless Lan sector, falling production costs and the advent of mobile computing will push global sales of 2.4 GHz Wireless LAN products to $1.3 billion in 2006. In particular, Frost & Sullivan expects demand for direct sequencing 802.11b chipsets to soar to new heights.

The growth of the market for HomeRF chipsets will be fueled by the U.S. Federal Communications Commission's (FCC) decision to allow data rates of up to 10 Mbps for HomeRF products.

However, the study points out, this technology will be limited to multi-PC home environments and some small offices. The HomeRF sector will be driven by the falling costs of frequency hopping chipsets and the increase of home networking.

Meanwhile, a decline in the DECT chipsets market is expected as chipsets prices decrease due to the maturity of the technology and the relaxation of the standard to accommodate lower quality chipsets.

All of these technologies operate in a similar environment and offer complementing and substitute functionality for each other.

Suppliers, large and small are emerging to content for a share of the market, leveraging their resources to provide integrated solutions from silicon wafer to consumer product level.

Philips Semiconductors is the eminenet supplier of volume semiconductors while Cambridge Silicon Radio and Silicon Wave top the list of smaller semiconductor developers.

In the design services arena, TTP Communications and Widcomm compete alongside Microsoft and Intel in delivering complete or partial protocol stacks to semiconductor developers.

The software stack is one of the most crucial elements of the solution, according to the report, cementing its significance in the Bluetooth space as semiconductor companies come closer to launching their offerings onto the market.

The Bluetooth figures stated cover the main applications that Frost & Sullivan foresees integrating the technology over the next few years, and excludes some of the more speculative applications such as white goods or clothing.

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