WiFi Becomes A Commodity
On Tuesday, Conexant Systems Inc. preannounced lower earnings for the cureent quarter, based on an influx of low-cost WiFi chips produced by Taiwan manufacturers. Conexant executives said that the price of 802.11g components is now on the order of 802.11b chips in certain markets.
Although the WiFi market has been continually remade as new 802.11 standards have been finalized, a sense of stability has emerged now that the 802.11g standard has been finalized and products have entered the market. The most recent addition, 802.11i, will update the security protocols used inside the 802.11 specification beginning this September, when the first products are certified for compatibility.
In the December timeframe a number of Taiwan-based competitors began fabricating extremely low-priced 802.11g chips, which they then marketed to the ODMs which design the routers and switches shipped as products from companies like D-Link or Linksys, according to Conexant chief executive Armando Geday, who hosted a conference call with analysts on Tuesday.
"These additional competitors exacerbated pricing pressure in a market already characterized by severe price competition," Geday said in a statement, which he read during the call.
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