News

North America lags behind Europe, Asia-Pacific in hotspots

• By John K. Waters
• December 3, 2003

It looks like the global market for Wi-Fi equipment and services is going to grow like crabgrass in the next five years. However, when it comes to hotspot propagation, North America's side of the fence probably won't be the greenest.

That is the conclusion of two newly published studies of the global Wi-Fi market. In WiFi in North America and Europe: Telecommunications' Future 2003-2008 , analysts at Insight Research Corp. predict that the market for products and services based on the 802.11 specification -- better known as Wi-Fi -- will grow from revenue of $7 billion this year to $44 billion by 2008. The New Jersey-based telecommunications market researchers also pegged total global spending on the technology at $163 billion over the next five years.

That analysis also concluded that the European market for wireless LANs -- the public hotspots that have begun to appear in a growing number of airports and coffee shops around the world -- will grow at a faster rate than that of the North American market.

If Europe does outpace the use in hotspot proliferation over the next five years, industry watchers suggest that the faster rate may actually be a result of slower European adoption of earlier technologies. Fewer new buildings in Europe are threaded with Ethernet cabling than in North America, experts note, and the expense of retrofitting is likely to make wireless a more attractive solution. The Insight report also cites Europe's cafe culture and greater use of mass transit systems as a potential driver of public hotspot adoption.

''Some analysts believe that broadband access is driving the adoption of Wi-Fi, while others contend that Wi-Fi is driving broadband,'' said Robert Rosenberg, president at Insight. ''Our analysis suggests that they drive each other in a complementary way -- creating greater demand for broadband services across the board. We expect growth of European Wi-Fi services to surpass North American service revenue well before the end of our forecast period.''

This Insight report forecasts revenue for North America and Europe by core network equipment, antennas, end-user devices, wireless Internet service providers (WISPs), traditional ISPs, fixed operators and mobile operators.

The Insight report did not offer specific numbers when it came to the differences in regional hotspot proliferation, but another report, published by the Radicati Group, did. In its monthly Messaging Technology Report, the Palo Alto, Calif.-based market research firm predicted that the spread of hotspots in North American would trail both Europe and the Asia-Pacific region. North America's share of the 477,000 hotspots Radicati expects to see worldwide by 2007 will slip to about 34%, down from 64% today, the report concluded. Meanwhile, Europe will account for 38% by 2007, while the Asia-Pacific region will account for 24%.