Hardware Companies Show Increased

By Melanie Hollands  |  Posted 2003-04-02 Print this article Print

Interest"> Increasing interest by major hardware makers indicates that WLAN is gathering momentum. Dell Hewlett-Packard, IBM, Toshiba have joined in the production of WLAN-enabled laptops, in some part because WLAN can boost, and justify, sales of higher margin laptops. As WLAN chips continue to get smaller, this should lead to increased usage in PCs and notebooks. Intersil is the chip maker having the greatest direct exposure, with 55% share of WLAN chips and 35% business exposure to WLAN. The other WLAN market share leaders are Agere (around 20%), RF Micro Devices (10%), Atmel (5%), Texas Instruments (5%), and others account for the balance of 5%. Increased competition in the space is unlikely to impact current producers before the second half of 2003, and more likely in 2004.
WLAN chips can also be included in PDAs to support networking both inside and outside the corporate environment. In general, larger rather than smaller companies have been buying more wireless devices. While a device is a more affordable wireless solution for a smaller firm, smaller companies have fewer mobile users to justify the not insubstantial costs of installing Blackberry servers to provide secure "behind-the-firewall" access. This could also suggest increasing interest in Palm-powered devices, which do not require such server installations.
On the other hand, Blackberry is a relatively inexpensive and outsourced infrastructure for larger companies that are not yet ready to install a full-scale wireless network. In part, demand for devices is driven by the degree of external access needed for such applications as data and email, versus internal access across dispersed operating facilities. Melanie Hollands is president of technology long/short hedge fund Koala Capital. She has over a decade of experience covering the technology and telecom sectors from positions in strategic consulting, corporate finance and equity research.


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