Study: Wireless Hot Spot Market Poised To Expand

The Dallas-based research firm estimates that service revenues from public hot spots will total $105 million in 2003 and then more than double to $220 million in 2004, growing at a compound annual rate of about 50 percent through 2007. However, Parks research analyst Yuanzhe (Michael) Cai said the current hot-spot market still remains relatively small, which explains the dramatic growth rates projected.

The Parks study, which polled consumers and service providers, segments hot-spot users into three groups: business subscribers, broadband subscribers and ad hoc users. Going forward, service providers will need to craft different business models to cater to the usage patterns and other demands of these hot-spot user groups, the research firm said.

What's more, service providers must work to expand the hot-spot user base, according to Parks. The study found that business travelers are the chief users of hot spots and will remain so for years to come. As a result, carriers must bundle hot spots with their other telecom services and provide continuous support in order to grow the hot-spot user community beyond "road warriors," the report said.

One factor driving the hot-spot market is the increasing integration of wireless capability in notebook PCs. For example, about 16 million laptops with embedded Wi-Fi capability are expected to ship to businesses this year, according to a study by In-Stat/MDR. By 2005, 95 percent of notebook computers stand to have Wi-Fi functionality, with the extra cost of wireless capability becoming virtually transparent to the laptop user, the Scottsdale, Ariz.-based research firm said.

In addition, dual-mode wireless equipment--supporting both 802.11a and 802.11g products--will become the platform of choice over the next few years, according to In-Stat/MDR. Chip makers such as Atheros, Texas Instruments, Broadcom and Intersil are now focusing on a/g solutions (802.11g is backward-compatible with 802.11b), and Intel is slated to roll out a dual-mode mini PCI in its Centrino mobile processor by year-end, the research firm said. Dual-mode clients and access points also are shipping in rising quantities and are poised to eclipse 802.11a-only equipment, the study said.