[February 8, 2005]

$45M WiFi VoIP Handset Market to Grow Thru 2009

BY JOHANNE TORRES

According to Infonetics Research's latest report, worldwide WiFi VoIP-based handset revenue totaled $45 million in 2004 with unit sales totaling 113,000. The San Jose, CA-based firm’s report titled WiFi Phones Annual Worldwide Market Size and Forecast also sees a strong device sales growth through 2009 as enterprises slowly but steadily continue to deploy voice over wireless LANs (VoWLAN) technology.

The report explains that worldwide hybrid WiFi/cellular handset revenue hit $6.6 million in 2004, and units totaled more than 8,000. With units being commercially available in 4Q2004, analysts forecast revenue and unit sales to grow dramatically by 2009 as enterprises take advantage of the opportunity to offer their employees flexible mobile access over different forms of wireless networks.

The firm concluded that WiFi VoIP-based handsets represent a fairly small market currently, but one with great potential across several market segments. The study explores the devices’ sales initially within the enterprise space, in logistics and healthcare verticals in particular, where VoWLAN is already gaining momentum but will become more widespread as both VoIP and wireless LAN adoption continues to grow rapidly.

The study also reveals that there is potential for enormous growth in the consumer space, as broadband service providers offer both VoIP services and wireless gateways bundled with a broadband connection.

"Wi-Fi capability will eventually become a common feature in cell phones, just as it is becoming standard in laptops today, giving mobile operators a big opportunity with WiFi voice," said Richard Webb, directing analyst for Infonetics and author of the report. "But voice over wireless Internet devices have the potential to be a hugely disruptive technology, too. One big factor is the low cost of calling, especially long distance, overseas, and during peak hours. The traditional model of time and distance-based pricing for voice calls will be eroded by VoIP, and as VoIP goes wireless, this will present a challenge not only to fixed line operators, but to mobile operators as well."

Research unveiled that once prices come down, more hybrid WiFi/cellular handsets will reach the market, enabling enterprise users and consumers to roam across wireless home networks, the corporate wireless LAN, and public WiFi hotspots.

"There are technical issues to be worked through before wireless Internet calling becomes viable commercially, such as quality of service (QoS), roaming across different wireless platforms, and also the relatively short range of WiFi signals," Webb added. "But with vendors currently working towards standards to address these challenges, it is likely we will be at the foot of the adoption bell-curve by mid-2006."

The WiFi-based phones report tracks VoIP handsets with integrated WiFi (802.11) functionality and hybrid Wi-Fi/cellular handsets, and provides 2004 market size totals, annual revenue and unit forecasts through 2009, and analysis of the WiFi-based phone market for all regions (worldwide, North America, EMEA, Asia Pacific, and CALA).

Infonetics Research
www.infonetics.com