The "Wireless Nirvana" Of Home Entertainment

Wi-Fi, UWB and Powerline ICs Are Taking Over Home Entertainment

OYSTER BAY, N.Y. -- April 29, 2003 -- Just when the wired networking world was unraveling, the industry was bit by the wireless bug. A world with no wires at all is simply an imagination at this point, until utility companies figure out a way to send current and voltage through thin air.

While that may not be possible in the near term, the concept of sending data, video and audio content wirelessly seems to be the near-term future of networking information and distributed computing. "The industry is at the brink of a communication and networking revolution," predicts Vamsi Sistla, ABI Senior Analyst and author of a new study on these integrated circuits (ICs), "Entertainment Networking ICs." "We are inches away from a 'wireless nirvana,' with WiFi and UWB wireless technologies taking center stage."

The key protocols and technologies vying for home entertainment market share are 802.11* based technologies, UWB and Powerline communications. Each of these technologies will find their niche market segment in the world of home networking. ABI predicts that the industry will see products based on multiple technologies and protocols, in which all can exist and adapt peacefully. "Next generation of PC/CE (consumer electronics) convergence devices," according to Mr. Sistla, "will start to offer video transferring capabilities, along with audio and image files. Device makers will also start to integrate audio and video decoders within these convergence devices for transferring and storing audio and video content in realtime."

Wired networking is cost prohibitive when compared to that of WiFi solutions. The key to wireless' projected success is the rapid drop in silicon prices, in tandem with consumers' reception to the inherent benefits of mobility and flexibility. Already low and decreasing costs of WiFi implementation, gear and deployment are some of the main drivers of WiFi technologies.

According to ABI forecasts, in 2007, the number of UWB shipments will reach one-fourth of that of WiFi and other wireless chipset shipments, and the number of PLC shipments will reach one-third of that of WiFi and other wireless chipset shipments.

Some key observations from ABI's latest study include: · Worldwide revenues of WiFi and other wireless chipset shipments for A/V applications will reach anywhere between $170 million to $290 million, in the year 2004 and beyond. · Wireless IC ASPs are expected to drop rapidly, despite 5 GHz solutions being more expensive than current 2.4 GHz solutions. By the year 2008, these video IC ASPs will drop to more than half of the value of video IC ASPs in the year 2003. · UWB IC ASPs for video and host devices will be in the $30 range in 2004, and will drop down to $22 to $25 in the year 2005. In the year 2006, the ASPs will drop down below the $20 range. · UWB chipset shipment growth for video and host device applications will more than double in the years 2005 and 2006, from 1.5 million UWB IC shipments in the year 2004 to 3.4 million UWB IC shipments in the year 2005, and to 7.7 million UWB IC shipments in the year 2007. · According to ABI latest research, Powerline A/V chipset revenues will also see dramatic growths in the year 2004 and beyond. Overall, by the year 2008, Powerline IC revenue for A/V devices will reach over $270 million (moderate forecast).

ABI's latest report, "Entertainment Networking ICs," addresses the present and future of home networking ICs in the CE industry. The technologies covered in the study include 802.11b, 802.11a, and 802.11g, other hybrid wireless technologies enabling WLAN home entertainment, UWB, and Powerline (HomePlug 1.0 and others) communications.

ABI presents quantitative forecasts for the world market, for each "no wire" technology, including IC shipments from 2002 to 2008, ASP and revenue. A clear analysis of the networking technologies is presented with detailed forecasts and market trends in the chip sector. In addition, many of the chipmaker companies have been profiled with detailed analysis of their technology offerings and future roadmaps.

About Allied Business Intelligence Allied Business Intelligence Inc. is an Oyster Bay, N.Y.-based technology research think tank and consultancy founded in 1990. ABI publishes research and technology intelligence on the wireless, automotive, electronics, networking and energy industries. Details may be found at www.alliedworld.com  or by calling 516-624-3113.