Abstract
Both Nokia and Motorola announced plans to roll out WLAN handsets with built-in Wi-Fi back in 2004. In 2005, the VoWLAN application seems to be gaining heat again, with Nokia talking of making all of its enterprise mobile handheld devices support Wi-Fi in less than two years. Not only have chipmakers Broadcom, Philips, and TI introduced Wi-Fi chip solutions, service provider Vonage also pledged to provide subscribers with Wi-Fi handsets in March 2005. Movements from service operators, mobile phone makers, and communications chipmakers hint at an even more promising development for the VoWLAN application in 2005.
Chipmakers have switched from aiming for smaller and lower power consuming WLAN chips to providing Wi-Fi VoIP solutions. Their target applications have also expanded from Wi-Fi PDAs to Wi-Fi cordless phones and Wi-Fi cellular phones. However, in terms of VoWLAN application, Wi-Fi PDAs and Wi-Fi cordless phones will possess larger market scale in the near future, while Wi-Fi cellular phones will not experience explosive growth in another two to three years.
PDA's core value, the PIM (Personal Information Management) function, is gradually being eroded by Smartphones and multimedia players. Hoping to carve out a way with stronger wireless voice and multimedia applications, many high-end PDAs are now embedded with 802.11b modules. Due to the popularity of Softphones such as Skype, VoIP application is taking off. A number of PDA makers began claiming that bundling Wi-Fi and Softphone, their models allow consumers to make VoIP calls at home, office, or even at hot spots. Chipmakers have also rolled out new-generation WLAN chips that are not only smaller and more energy efficient, but also support the 802.11i standard. With chip prices fallen to the US$5 level, PDAs with built-in Wi-Fi modules can easily expand to include mid-range and entry-level models, stimulating demand for models with Wi-Fi chips that achieve lower power consumption. Global PDA shipment volume in 2004 reached approximately 11 million units, of which 40% adopted the Microsoft Windows operating system. Should Softphone capabilities become a killer application for PDAs, annual market scale for WLAN chips in the PDA segment will come to around 400 million units.
Due to the rapid growth of residential VoIP services and intensifying competition among operators, Wi-Fi cordless phones have a chance to move from the enterprise market into the general consumer market. In 2004, global enterprise Wi-Fi cordless phone shipments totaled to just 150,000 units. However, basing a calculation on the nine million residential VoIP service subscribers worldwide, as was recorded in 2004, larger business opportunities lie in the residential VoIP segment. In the next few years, new wave of market demand is projected to emerge as more residential VoIP service providers begin providing and installing Wi-Fi cordless phones.
In the short run, mobile operators will not be willing to launch VoWLAN services lest they erode into revenues from mobile voice services. In the coming one to two years, prior to the maturity of dual-network roaming technology and completion of the necessary infrastructure, WLAN embedded in mobile handsets will be used primarily for data transmission. However, mobile phone subscribers may tend to save airtime fees by leverage Skype in a WLAN environment. Under such considerations, mobile phone makers may increase models with built-in WLAN, expanding from the high-end Smartphones to mid-range models. Smartphones, which adopt more embedded WLAN modules than any other phone model, are estimated to have accounted for 3% of global mobile phone shipments in 2004, of which 9% were equipped with Microsoft operating system. Along this line, around one million Wi-Fi cellular phones with Softphone functions will be shipped worldwide in the 2005-2006 period. This marks a significant market opportunity even when compared to wireless PDAs or Wi-Fi cordless phones.