Oversupply and low-cost entrants to the market for wireless Internet chips are causing prices to plummet as volumes grow, according to a study released by market researcher TechKnowledge Strategies Tuesday.
The average price for a chip that enables connections for an 802.11b wireless LAN (WLAN), also known as Wi-Fi, was $16.06 in 2002, but that price will drop to $6.61 by the end of 2003, said Mike Feibus, principal analyst for TechKnowledge in Scottsdale, Arizona. Revenue from the sales of all wireless chips is expected to decline to $340.2 million in 2003, from $368.7 million in revenue last year, even as volumes soar from 22.5 million to 41.3 million chips sold.
I hope that this is correct and that 802.11b prices drop even further.