Latest market data from research firm In-Stat/MDR illustrates that demand for wireless local area network (WLAN) equipment and services in the China marketplace is surging. The high-tech research firm expects WLAN equipment revenues in China to increase at a near 33 percent compound average annual growth rate (CAGR) from about $54 million in 2004 to almost $160 million by 2008. The company has found that although China Netcom deployed the first WLAN service in China in 2001, foreign equipment providers still hold the lion's share of the WLAN market in this region with a combined 70 percent share of overall revenues.

Adding to upward momentum for WLAN in the China region are sharply decreasing costs for both WLAN equipment and notebook computers-a trend that will continue to lend attractiveness to WLAN usage, especially for high-end business users. With its enormous population, China as a market still exhibits low penetration rates for PDAs and notebook computers. However, analysts believe that notebook computer sales are expected to increase by 30 percent this year and an increasing number of those will be shipped with WLAN capability.

Other factors driving growth for WLAN in the China marketplace include:

• A continuation of strong economic growth, in the 7 percent annual range.
• Government push for swift modernization.
• Strong consideration at the enterprise level as demand increases rapidly for advanced services and "anywhere, anytime" connectivity.
• Increasing mobility in the user base.
• Equipment providers actively promoting WLAN.
• A gradual but continual rise in urban income.

While market detractors continue to exist in the form of security issues and a still-low awareness of WLAN's attributes, In-Stat/MDR feels that the market is poised for strong growth over the forecast period. The report is titled "China's WLAN Market Analysis and Forecast 2003-2008." It includes a discussion of about how WLAN technology will develop over the next five years, as well as information on the companies that participate in this widening industry, including network equipment vendors and service providers. Also explained is the crucial importance of standards, security and government involvement.

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