WLAN Market is Exploding into Oblivion

One of the more remarkable balancing acts in markets is that of increasing revenues in a fast-growing semiconductor market. Why? Because average selling prices (ASPs) tumble so quickly that you have to grow like asparagus weed merely to maintain the status quo.

Case in point: the wireless LAN business. According to industry figures, the WLAN chip market grew 176 percent last year to $622 million, meanwhile selling prices declined by 40%.

Did you get that? As a WiFi chip vendor you had to increase units by 40% in 2003, just to stand still. But despite that formidable hurdle, total market revenues grew by 176% last year. The question “What does it mean overall unit growth did last year?” is left as an exercise for the reader. 

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