Abstract

Improvements in transmission speed have been at the core of the evolution in WLAN standards -- from the 11Mbps of 802.11b to the 54Mbps of 802.11g, and on to the 135Mbps of the future 802.11n standard. Security and QoS (Quality of Service) standards are also key factors in this evolution, as embodied by 802.11i and 802.11e, respectively. The 802.11i standards was ratified in June 2004, while 802.11e will need to wait until 2005.

Previously, WEP (Wired Equivalent Privacy) was adopted as the WLAN security standard; however, the standard was long decried for its poor security. As the Wi-Fi Alliance added TKIP (Temporal Key Integrity Protocol) in 2003, encryption keys changed from static to dynamic. Although this improved security, it still employed the RC4 algorithm used with WEP.

802.11i standard adds the AES (Advanced Encryption Standard) with CCMP (Counter-Mode / CBC-MAC Protocol). This encryption mechanism supports 128, 192, and 256-bit encryption, which dramatically improves WLAN security. 802.11i also incorporates EAP (Extensible Authentication Protocol), which can be bundled with RADIUS servers to provide user authentication.

The ratification of the 802.11i standard will open up more roads for WLAN to replace wired networks in the enterprise market. Enterprises have long been hesitant toward the adoption of WLAN, reserving its application mainly to notebook PCs, where the technology acts merely as a supplement to wired networks.

The price and performance gap between notebook and desktop PCs continues to close, while mobile workers are increasing in number, further stimulating notebook replacement of desktop PCs. Moreover, the introduction of 802.11i will address the security concerns the enterprise segment has harbored against WLAN, helping the technology to move beyond its supplemental role and become a dominant means of network access in enterprises. The changing role of WLAN in enterprises will have a profound effect on WLAN equipment growth.

However, given that the standard has only recently been established, there will continue to be interoperability problems among different makers. The Wi-Fi Alliance is thus requiring the inclusion of WPA2 after the first quarter of 2005 to help resolve interoperability issues. 802.11i system deployment also will encounter compatibility issues with different RADIUS server makers and EAP certification choices. These are problems that will affect actual implementation of 802.11i.

Finally, in addition to the higher penetration of WLAN modules in the enterprise market, the enterprise segment will become a major market for WLAN AP, especially as WLAN functionality is increasingly integrated in routers in the SOHO segment.

Appendix

Research Scope

Taiwanese WLAN shipments encompass all WLAN NIC, modules, and access points produced by Taiwanese makers anywhere in the world.

Definitions

Business Types

OEM

The OEM (Original Equipment Manufacturing) business model entails carrying out product manufacturing or assembly according to specifications supplied by the customer. The OEM business model emphasizes production efficiency; thus, in order to lower costs, customers outsource manufacturing to OEM providers. This cooperation forms a division of labor among design, manufacturing, and sales.

ODM

The ODM  (Original Design Manufacturing) business model entails undertaking product design and manufacturing, but not direct retail sales or brand promotion. ODM providers either collaborate with customers on product specifications or independently design products according to customer specifications; the ODM provider then receives manufacturing orders upon customer approval. The ODM model links the sales capabilities of the ODM customer and the design and manufacturing capabilities of the ODM provider, developing a cooperative division of labor throughout the product's value chain.

Glossary of Terms