802.11n routers are broadening adoption with forays in the consumer electronics segment, threatening to dislodge 802.11b/g.
The broadening adoption of Wi-Fi in telecom, computer and consumer electronic devices is speeding up the shift to wireless in China's networking equipment industry, particularly in the router sector. It is also fueling a rebound in the country's access point segment, which contracted in recent months due to the rise of combination products integrating the AP function.
Makers anticipate an upswing in demand as Wi-Fi transcends the enterprise network and extends to consumer electronics, especially HDTVs and digital cameras, smartphones, and desktop and notebook PCs. Aggregate connections are projected to hit 285 million by 2012 from 113 million in 2008, according to ABI Research. Worldwide chip exports will reach 1 billion by 2011 and breach the 5 billion mark the year after. Suppliers estimate wireless configurations now take up more than 50 percent of the overall router output.
Even though wired versions will continue to dominate the mainstream core router line, cablefree models will strengthen their foothold in the family and SOHO lines. In the last sector, shipments of this type are about three times that of wired units.
Reflecting global trends, China's total yield of nonwired routers surged 25 percent in 2009. The country currently accounts for 60 to 70 percent of world supply in this category.
B-Link Electronics Co. Ltd said its turnout of cablefree models grew 50 percent in 2009. Full River HongKong Ltd devotes 80 percent of production to such units. The majority of devices adopt 802.11n, while the rest comply with 802.11b/g. Wired versions take up only 20 percent of output. Some companies, including Haoliyuan (Shenzhen) Electronic Co. Ltd, do not provide wired routers. The maker offers APs, cablefree routers, Ethernet switches, LAN cards and adapters, USB LAN products and WLAN cards. It sees demand for the first two devices climbing this year, with APs increasingly adopted in large and midsize enterprises.
802.11n to capture the mainstream
Taiwan: Value additions highlighted to boost competitiveness
Hong Kong: Shrinking supply targets residential, SOHO uses
The ratification of 802.11n in 2009 provides additional momentum to the wireless networking equipment industry, particularly routers and APs, fast-tracking R&D and product rollouts. The standard is seen to displace 802.11b/g and capture the mainstream this year.
Worldwide shipments of 802.11n APs rose nearly 44 percent YoY in 2009. Demand was particularly strong in the enterprise category, according to ABI Research. In the SOHO and consumer segments, exports are projected to reach 32 million this year.
Another trend bellwether is the ongoing migration to chips designed for 802.11n. In-Stat forecasts the IC sector supporting this standard will post more than 100 percent growth in coming months, spurred by mobile devices and laptops.
Already, routers based on this protocol account for over 50 percent of the total nonwired router yield. Suppliers expect the share to rise further this year as companies shift to the upgraded Wi-Fi version. In addition to better signal coverage and transmission penetration, the technology enables a data rate three to five times faster than 802.11g.
In Full River, 802.11n configurations represent 60 percent of total router production. The company makes about 70,000 units of this type a month, and the volume is expected to grow by more than 20 percent in 2010.
Declining prices likewise augur well for the standard. Some suppliers predict quotes of equipment based on 802.11n will drop to $14 or $15 in coming months and close the gap with 802.11g devices, which list at $12. This will translate into rising orders for the former.
China makers' router selections comprise wired and wireless models. The first type dominates the core router sector, and is mainly targeted at low-end and midrange applications. Cablefree units are increasingly utilized in the SOHO market. The ratification of 802.11n and the trend for nonwired connection will push such varieties to the mainstream in coming months.
Currently, makers offer 802.11g and 802.11n versions. The first kind works with 802.11a/b/g devices, while the latter support 802.11a/b/g/n equipment. Supply of the second type will rise significantly this year.
Routers based on the 802.11n protocol enable WAN, with PPPoE, Static IP, PPTP and DHCP. They have NAT/NAPT IP sharing, virtual server, DMZ, 64/128-bit WEP, WPA/WPA2-PSK, WDS mode, MAC/IP filter and URL blocking.
Some units combine a 4-port switch and deliver 54, 108, 150, 300 and 450Mbps rates. Prices range from $17 to $40. The BL-WP05 model from B-Link supports 802.11n Draft 2.0, 802.11b and 802.11g. It can provide a 450Mbps transmission speed and enable WPS, 64/128-bit WEP, WPA and WPA2. The unit lists at about $30.
Devices complying with 802.11g incorporate virtual server, DMZ, 64/128-bit WEP, and IP, URL, port and Mac address filter functions. The maximum data rate is 54Mbps, although actual performance reaches only 20Mbps.
Models belonging to this category also have CSMA/CA, CSMA/CD, TCP/IP, PPPoE, DHCP, ICMP, NAT, firewall, and fixed WAN and LAN interfaces. They enable a transmission range of 100m indoor and 300m in open space. Quotes are between $13 and $18.
R&D efforts revolve around integrating more functions. Upcoming 802.11n variants will likely combine additional encryption capability and access control features.
Customization is another priority, with the emphasis on power output and physical topology. Several companies are looking to explore WiMAX.
To widen reach in the home segment, more routers will incorporate multimedia player and digital photo frame functions. Some will also merge data center capability.
Makers use chips from Broadcom, Atheros, Realtek and Ralink. A growing number of manufacturers are adopting solutions from the last for cost-performance considerations.
As for wired routers, mainstream models are typically equipped with 10/100Mbps WAN and LAN ports. Most support auto-MDI/MDIX, built-in firewall, and domain name, and IP and MAC address filter. These enable access control based on time of day, with the network administrator able to set ingress terms. Some units have more management functions to distribute the bandwidth better. Others also incorporate parental control, UPnP, DDNS and VPN.
High-end versions have 1,000Mbps WAN and LAN interfaces. These are designed for large-scale and telecom-grade networks.
Although R&D in this sector is not expected to gain more steam in coming months, several makers plan to up the ante in terms of data rate to improve transmission. Many therefore expect 1,000Mbps units to rise in supply, and some will even launch 10,000Mbps varieties. To follow the trend for energy-saving equipment, a few companies are developing routers with low power consumption.
Priced at least $1 lower than wireless routers, APs are expected to enjoy stronger demand this year. Besides the declining quote, an important growth driver is the product's widening application in large and midsize enterprises switching to a cablefree setup. Penetration has likewise been rising in schools, mining operations and military.
More APs are projected to step up to 802.11n but the mainstream supply this year will continue to be led by 802.11b/g versions. Such units deliver 54 to 108Mbps, with basic varieties supporting 50 to 100m indoor and 400 to 800m outdoor ranges. They have 802.3u/x, 802.1X, CSMA/CA, TCP/IP, ICMP and NAT, and WPA, TKIP, AES and WPA2. Some also work as a bridge, wireless repeater and client device.
High-end variants are designed for telecom-grade services, boasting large coverage and high transfer rate and sensitivity. The operating range of upscale models is between 500m and 3km. Most are equipped with a 14dbi directional or 8dbi omnidirectional gain antenna. Some are resistant to water, dust, acid and extreme temperatures.
Convergence is permeating Taiwan's access point and router industry. Under efforts to add value and boost margins in an increasingly competitive line, makers are integrating 3G and fiber-optic technologies into routers targeted at the high-end segment. Gigabit passive optical network is the primary choice for the latter type of connectivity as it is rising in popularity in East Asia, Europe and the US.
Wi-Fi routers with ADSL capability, meanwhile, are seen as a potential growth driver in emerging markets such as India. The integration of DSL allows companies to tap into the robust broadband sector. DSL accounted for more than 60 percent of the global industry in 2009, according to Market Intelligence & Consulting Institute.
Another strong trend highlights 802.11n capability. The mainstream wireless APs and routers from Taiwan support 802.11b/g. Beginning 2H09, however, makers have been switching to the former, which is predicted to dominate R&D and supply in coming months.
The island's Topology Research Institute said 802.11n will be one of the main driving forces of the WLAN industry this year.
The narrowing cost gap with 802.11g and the release of new laptops compliant with the first will speed up market penetration. It could replace 802.11b/g by 2011.
APs and routers from Taiwan are mainly adopted in home and SOHO applications. Specifically, these are targeted at ISPs and telecom companies.
Routers combining ADSL2+ or VDSL2 capability are regarded as entry-level. High-end versions support 802.11b/g or 802.11n. They combine ADSL2+ with integrated access device functionality, VoIP, or VDSL2 IADs. When used with an external dongle or embedded module, some models can deliver 3 or 3.5G connectivity. One popular value-added feature is the firewall for enhanced security.
Tight competition from mainland China and Taiwan has contracted the access point and router segment in Hong Kong. Production remains in a downward trend as more companies reduce output or leave the line temporarily.
Fewer than five makers are active, most of which have slowed down on OEM and ODM activities because of weakened demand. Under efforts to survive, a number are pursuing own-brand manufacturing, which promises higher margins per unit despite the lower sales volume. APs and routers from Hong Kong are generally designed for residential and SOHO applications. The majority of models are single-band versions with advanced security capability. Standard features include multiple and hidden SSID, NAT, SPI, DoS, DDNS, port forwarding and mapping, QoS and IPsec. To maximize transmission speed and signal range, the devices come with several external antennas.
More variants supporting 802.11n are expected to roll out in coming months as 802.11b/g units exit the line steadily. Some makers add value by integrating a VDSL2/ADSL2+ modem, VoIP DECT router or power line communication equipment. A few include a USB port for a shared printer or storage device.
In addition to enhancing security and incorporating extra functions, companies are emphasizing installation design and network management features. Many are not innovating on the visual appeal of products. Most units therefore come in a rectangular form factor, in white, silver or gray, and with black external antennas.
Aztech Systems H.K. Ltd's HW550-3G model is a 4-port N router that doubles as a mobile broadband router when connected to a 3/3.5G USB modem. It supports Smart MIMO technology, 64/128-bit WEP, WPA/WPA2-PSK, TKIP and AES wireless security. The HW550-3G has detachable antennas and enables easy pairing.
The RT-WL-N-SW4 model from Connectland Technology Ltd is an 802.11n MIMO router with a 300Mbps data rate. It combines a 4-port switch and three detachable 2dBi antennas, and WEP, WPA and WPA2.
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