IEEE 1394 (1394) is a high-speed serial bus found in PCs, PC peripherals and consumer electronics (CE) devices. The technology is facing a crossroads in 2007. In spite of advantages in flexibility and the ability to handle video, 1394 has been the second choice technology in most devices. For example, 1394 has long been found in 25 – 30% of PCs. However, this is dwarfed by high-speed USB’s 100% penetration of that same market. With such ubiquity in the PC market, high-speed USB has become the interface of choice for PC peripherals such as printers, scanners and external hard disk drives, largely relegating 1394 to an afterthought in the segment.
Something similar is happening in the CE segment, where 1394 is being surpassed by HDMI as the digital interface of choice in digital televisions, set top boxes, and DVD players. HDMI does not have the flexibility of 1394; it is unidirectional and uncompressed. However, it is becoming a standard interface in the digital television market, where 1394 had well under 20% penetration in 2006. Even markets where 1394 was very strong, such as camcorders, are slipping away. The highest growth segments of the camcorder market are in DVD- and hard drive-based devices, where 1394 is not found. And as camcorders move away from 1394, DTV vendors will become less inclined to include it. However, one bright spot for 1394 in the CE segment is DVD recorders, which use 1394 for archiving camcorder video. And with the MPEG-2 compression found in blue laser recorders, 1394 will likely be used to record television programming in the future as well.
1394 backers are pursuing the home networking space. 1394 is optimized for home networking, particularly 1394b, which is capable of higher speeds and longer range than the more common 1394a. However, 1394 has been swamped by the success of Ethernet and Wi-Fi in the home. The emerging 1394 over coax standard allows 1394 signals to travel over coax cables by means of UWB technology. It offers 1394 its last best chance of being accepted as a networking technology. However, the difficulties of acceptance will be great, including limited penetration of 1394 CE devices, and the huge installed base of Ethernet and Wi-Fi-based home networks.
Overall, 1394 is the second choice technology in a number of markets. It has never been able to gain traction and dominate any one market. This status leaves it vulnerable, and that vulnerability is catching up to it. In the long run, while 1394 will survive, it will increasingly be relegated to niche status.
If the aforementioned 1394 competitor USB is of interest to you, be sure to check out “USB 2007: Wireless Finally Arrives,” report #IN0703527MI, available online at:
The Wi-Fi chipset market continues to boom, with Wi-Fi taking hold in a growing number of device categories. Traditional networking segments, including home/SOHO AP devices (including Wi-Fi routers and gateways) and external clients, were large pieces of the Wi-Fi chipset market pie in 2006, and home/SOHO AP devices are expected to show healthy growth over the forecast period. But across the forecast period, from 2007 through 2011, portable connectivity applications will drive Wi-Fi’s growth; Wi-Fi's primary market segment drivers are expected to be Mobile PCs, Portable CE devices and Dual-Mode Cellular/Wi-Fi handsets.
Overall, several factors have influenced the growth and evolution of the market over 2006 and throughout 1H07:
Booming Mobile PC Market. Practically every mobile PC that ships out has embedded Wi-Fi; consequently, this segment was Wi-Fi's main growth segment in 2006, and is forecasted to be the number one market segment through 2011. More than 84 million mobile PCs with embedded Wi-Fi shipped out in 2006, a 33% increase over 2005's total shipments of 61 million. Shipments are expected to reach almost 110 million in 2007. Notebook PC prices continue to plummet, while performance and power continue to improve. Worldwide, mobile PCs are displacing desktop PCs. Budget notebook PCs are pushing the $500 price point on the low-end, and new segments of mobile PCs include UMPCs, as well as the devices that are shipping under the One Laptop Per Child (OLPC) movement, which promises to move several millions of these devices over the next few years.
Strong Sales of Handheld Games. Over 30 million Nintendo DS and Sony Playstation Portable (PSP) devices shipped out in 2006, and volumes are expected to approach 30 million once again in 2007. More and more, Nintendo and Sony are capitalizing on Wi-Fi's value by enabling on-line game play and other applications through Wi-Fi networking.
Microsoft's Zune. The release of Microsoft's Zune in late 2006 is expected to kick-start the uptake rate of Wi-Fi onto Portable Media Players (PMPs), which includes portable digital audio players. The PMP market accounted for 170 million units in 2006, and is expected to grow to 190 million units in 2007. Although Microsoft is not expected to take significant share in this market segment, which is heavily dominated by Apple, Microsoft's move is expected to drive other PMP vendors to attach Wi-Fi. Sure enough, Sansa released the Sansa Connect in 2007, a Wi-Fi-enabled PMP. And, consequently, Apple is set to release a Wi-Fi-enabled iPod in 2H07. In-Stat expects a little over 5% of PMP shipments in 2007 to be Wi-Fi-enabled, which accounts for an estimated 10 million units. The Wi-Fi uptake rate is expected to experience healthy growth over the forecast period.
Combination Wi-Fi and Bluetooth Chipset Solutions for Cellular Handsets. With Bluetooth's attach rate to total cellular handsets nearing 50% in 2006, the integration of Wi-Fi with Bluetooth onto a single chipset could significantly help to drive Wi-Fi's uptake into cellular handsets. Marvell, Broadcom and TI have announced one-chip Wi-Fi/Bluetooth solutions. TI and NXP, who both are market leaders in the Bluetooth chipset market for handsets, have been offering single-chip Wi-Fi and single-chip Bluetooth solutions together as a package for the last few years, providing for optimal co-existence mechanisms between the two wireless technologies; a single chip solution integrating both technologies, where components are optimally integrated and co-existence mechanisms are provided, is the next step. Broadcom and TI are also offering FM radio on their single-chip combination Wi-Fi/Bluetooth solutions. With dual-mode Wi-Fi/cellular handset shipments expected to reach almost 27 million in 2007 (up from 6 million in 2006), combination Bluetooth and Wi-Fi solutions could really help spike the Wi-Fi attach rate.
Gaming Consoles' Reliance on Wi-Fi for Networking. Wi-Fi serves as a relatively cheap and effective way to enable access to console vendors' portals for online gaming, and access to downloadable content and applications. With the Sony PlayStation2 and Microsoft XBox, gamers used external Wi-Fi adapters to connect to their home WLANs. Released in late 2006, the PlayStation3 and Nintendo Wii were the first gaming consoles to embed Wi-Fi. Over 5 million of these consoles shipped out in 2006, with 20 million shipments expected in 2007. Meanwhile, the XBox360 continues to drive external Wi-Fi gaming adapters, with over 7 million external Wi-Fi gaming adapter shipments in 2006, and more than 8 million expected to ship in 2007.
The Release of "Draft n" Products. Speedy 802.11n products have been highly anticipated for some time, especially desired for providing high quality wireless media streaming in the home. Draft 1.0 802.11n products were released in 2Q06, in the midst of much controversy. Early testing did not go well for the early products, on both the interoperability and performance sides. But Wi-Fi chipset vendors have worked diligently to clear up these issues. Chipset vendors who released Draft 1.0 802.11n chipsets —namely Marvell, Atheros and Broadcom—breathed a sigh of relief when Draft 2.0 was ratified in March 2007, incorporating few significant changes to Draft 1.0. Although only a little over 2% of total Wi-Fi home AP shipments (including Wi-Fi routers, gateways and home APs) were Draft n in 2006, In-Stat expects this percentage to show a healthy increase this year, rising to approximately 15% of total home AP device shipments. One major reason for this is chipset vendors’ release of scaled-down 802.11n chipsets, allowing for sub $100 Draft n wireless routers to be available at retail.
For more information on the Wi-Fi Chipset Market, please see In-Stat’s report #IN0703869WT, “The Wi-Fi Chipset Market: Portable Connectivity Applications Drive Volumes,” available within In-Stat’s Cellular and Wireless Broadband Component Technologies Service, and available online at: http://www.instat.com/catalog/scatalogue.asp?id=3#IN0703869WT
