Cisco's wireless moves: Not just a bunch of air

You know a technology is hot when Cisco Systems starts throwing serious money at it. Considering the company has spent about $US2 billion to purchase wireless data companies in the past year, it's no stretch to say that wireless technology is the next sizzler.

And according to Cisco, the firm's recent investments couldn't have come at a better time as the wireless LAN market heats up, and user demand for high-speed access to corporate networks is at an all-time high.

`It looks like we timed wireless almost perfectly in terms of when we came to market and how much we bet,' Cisco president and CEO John Chambers said last December.

To wit: Cisco last November announced plans to acquire wireless LAN vendor Aironet Wireless Communications for $US799 million. Last February, Cisco and Motorola announced a $1 billion alliance to develop and deliver a framework for Internet-based wireless networks. Cisco and Motorola strengthened that alliance by jointly purchasing Bosch Telecom in Texas, and forming a new company called SpectraPoint Wireless.

SpectraPoint Wireless will focus on delivering data, voice and video to businesses over a fixed `last-mile' wireless infrastructure.

In October, Cisco announced a partnership with 10 huge companies, including Motorola, to drive standards for broadband wireless Internet services. And in November, Cisco rolled out its first products based on those standards.

Wireless LAN connections are expected to be a $283 million market in 2003, up from $168 million in 1999, according to analyst International Data Corp (IDC), who expects record shipments in traditional (retail, transportation and warehousing) and nontraditional (health care, education and home) markets over the next three years.

Wireless was always hot for voice, and more than 10 years ago it looked as if data could be a killer application for wireless. But back then, the market never really materialised.

`For Cisco, it's a natural evolution simply because they built the wire-line market, and now much of the data that was moved over wire-line will be ported over to wireless as well,' says Larry Swasey, vice president of communications research at Allied Business Intelligence (ABI) in New York.

`We've already seen the movement among Internet content providers, wireless operators, and hardware and software manufacturers to decide upon standards that should be used. Within the next 10 years, we're going to see an increasingly high number of minutes - percentage of usage - on the wireless network for data.'