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Wireless chipset market jumps on consumer demand

Wireless chipset market jumps on consumer demand

Manufacturers of wireless chipsets saw strong demand from mobile PCs, wireless routers and video games in 2005, an analyst report says.

Manufacturers of wireless LAN (WLAN) chipsets are expected to report annual growth above 50 percent for units shipped in 2005, spelling success for market leaders Atheros Communications, Broadcom and Intel.

Such growth would drive the market to reach nearly US$1 billion, up 27 percent from 2004, according to a report released Monday by Research and Markets, a market analysis firm in Dublin.

Most of that growth was driven by mobile PCs (45 million units), wireless routers and residential gateways for homes and small offices (40 million units) and external clients (25 million units), the report said.

Burgeoning demand for video games supported the rest of the market, leading to 30 million shipments for portable consumer electronics such as handheld games and stationary devices like gaming consoles and printers.

Atheros' quarterly fiscal results mirrored this trend. In a January press release the company, based in California, cited fourth-quarter revenue for 2005 of US$53.1 million, up 27 percent from the same period last year. The company drew its revenue by shipping a record 7.7 million chipsets.

Cities worldwide are also pushing demand, as they establish metropolitan wireless networks, said Atheros President and Chief Executive Officer (CEO) Craig Barratt in the release.

In the fourth quarter alone, cities used Atheros hardware to create metro Wi-Fi networks in Arizona, California, Louisiana, Massachusetts, Minnesota, Virginia and Northern Ireland.

Likewise, Broadcom in January reported fourth quarter revenue of US$820.6 million, an increase of 52.1 percent from the same period last year.

That growth was driven by a collection of trends in communications and convergence, said Scott McGregor, the president and CEO of Broadcom in California.

They included the convergence of voice and Wi-Fi in broadband modems, the adoption of personal video recording and high-definition video in cable, satellite and IP (Internet Protocol) set-top boxes, the convergence of video and audio in portable devices, and the adoption of Bluetooth into cell phones, headsets and PCs.

Demand for wireless chipsets will continue to grow as long as users keep buying devices such as cellular handsets that act as a camera or camcorder, handle e-mail and surf the Internet, McGregor said.

All of these trends are set to continue for several years, according to Research and Markets. Taken together, they will drive further growth for manufacturers of wireless chipsets, pushing the market from 140 million units shipped in 2005 to an estimated 430 million in 2009.


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