Pre-802.11n sells briskly despite high price

This is a case of getting what you pay for, more or less. The 802.11n standard has not yet been approved but pre-802.11n gear (or draft-802.11n, as some call it) is already available, with mostly small offices and companies investing in it. They're buying it even though it costs almost twice as much as gear based on ratified standards and while facing the risk of having to upgrade or even replace the equipment when the standard is finally ratified.

Market research firm Dell'Oro Group says that in the second quarter of 2006, vendors sold about $25 million worth of pre-802.11n routers and NICs (note that the figures do represent sales during the entire quarter because the first of the new products weren't available until after the quarter began). Selling briskly though they may be, 802.11n products still account for only a small fraction of the market. Pre-802.11n models made up about 8 percent of the router market by revenue and NICs about 6 percent--despite an average selling price of more than double that of gear using the current 802.11g standard. An average pre-n router costs $86, compared with $36 on average for 802.11g routers, according to Dell'Oro.

When the new 802.11g routers were certified in the first quarter of 2003, they came out of the gate running, accounting for 29 percent of the market. Note that the price premium then was considerably smaller: $115 compared to $90 for an 802.11b router.

Dell'Oro analyst Elmer Choy says that it is likely that draft-N products will not be upgradeable to the final standard, but that this will not hurt current buyers too much. "The prices are low enough that people can upgrade [to a new product] when the actual standard is approved. It's not like they have hundreds or thousands of clients, like they do in an enterprise," he said.

For more about the Dell'Oro report:
-see the firm's Web site

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