Wireless networking a bright spot for Cisco

Duncan Martell

PALO ALTO: While overall sales at Cisco Systems Inc. declined in its

recently-completed third quarter, there were some bright spots, among them

increasing sales of gear to power wireless networks - a fast-growing area that

the world's biggest maker of data-networking gear is honing in on.

"Our wireless sales are increasing," Charlie Giancarlo, who heads

Cisco's commercial and consumer group, told reporters during a briefing at the

company's San Jose, Calif. Headquarters on Thursday.

The market for wireless local-area networking, or wireless LAN equipment, is

a relatively new one for Cisco. Its November, 1999 acquisition of Aironet gave

it the initial technology it needed and it has subsequently added to it, rolling

out wireless base stations and the network cards needed to link laptop personal

computers to a wireless network.

Cisco's efforts appear to have paid off: The firm now holds a 31 per cent

share of the market for access points, or base stations, according to market

researcher Dell'Oro Group. In network cards - the credit-card-sized devices that

slip into laptop PCs - its share is 29 per cent. In both areas, it has as much

market share than any other competitor.

Cisco is now aiming for a market share of 40 per cent to 70 per cent, said

Cisco's Chief Strategy Officer Mike Volpi, who declined to give more details.

What's making this possible, not just for Cisco but for other networking

players, is a wireless communications standard known as 802.11b that has emerged

for devices to talk to each other across a network. Without it, there would be

too many different proprietary standards, making a rapidly growing market

exceedingly difficult, Cisco executives said.

The size of the 802.11b market, which was comparatively small at $800 m. in

1999, is forecast to swell at $2.7 billion by 2003, according to market

researcher Cahners In-Stat.

Although big companies, such as Microsoft Corp., Cisco and others will help

drive this market to the multibillion-dollar level, another seemingly less

likely group of institutions is helping the wireless network market get off the

ground: universities. More and more universities are rolling out wireless

networks, letting students log onto campus networks, access the Internet,

download lectures, texts and the like from classrooms, dormitories and even from

outside spaces on campus or cafes.

Microsoft, for example, is setting up a wireless LAN at its headquarters in

Washington and already has 3,000 access points installed on the campus and in

branch offices outside the regions. Nearly 7,000 workers are now using wireless

LAN cards in their laptops, and this slated to increase to 25,000 by the end of

the year, Giancarlo said.

In addition to the increasing deployments of wireless LANs at universities or

big businesses, wireless home networks will also begin to take off, the Cisco

executives said. Yet so far, the home wireless networking market hasn't taken

off as quickly as analysts and firms, had earlier predicted.

"We've all seen projections that have come and gone," said

Giancarlo, who has installed a wireless home network in his house so that his

family can all get on the Internet, work and send e-mails from anywhere at home.

That too, without having a cable that connects into a laptop or a PC.

"Instead of being alone in separate rooms, we can now be alone

together," Giancarlo joked.

(C) Reuters Limited 2001.