Wi-Fi VoIP handset market hits US$45M in 2004 with healthy growth projected

2005-Worldwide Wi-Fi VoIP handset revenue totalled US$45 million in 2004, with annual revenue and unit forecasts projected to show dramatic growth in coming years as enterprises take advantage of the opportunity to offer their employees flexible mobile access over different forms of wireless networks.

The new study from Infonetics Research entitled, "Wi-Fi Phones Annual Worldwide Market Size and Forecast", includes annual revenue and unit forecasts through 2009.

Worldwide dual-mode Wi-Fi/cellular handset revenue hit $6.6 million in 2004, and units totalled more than 8,000, the report said. Units were only commercially available in 4Q04, so this represents a market in its infancy; revenue and units are projected to grow dramatically by 2009 as enterprises take advantage of the opportunity to offer their employees flexible mobile access over different forms of wireless networks.

Wi-Fi VoIP handsets represent a fairly small market currently, but one with great potential across several market segments.

First, in the enterprise space, in logistics and healthcare verticals in particular, where voice over wireless LANs (VoWLAN) is already gaining momentum but will become more widespread as both VoIP and wireless LAN adoption continue apace.

Secondly, there is potential for enormous growth in the consumer space, as broadband service providers offer both VoIP services and wireless gateways bundled with a broadband connection.

Thirdly, once prices come down, more dual-mode Wi-Fi/cellular handsets will reach the market, enabling enterprise users and consumers to roam across wireless home networks, the corporate wireless LAN, and public W-Fi hotspots.

"Wi-Fi capability will eventually become a common feature in cell phones, just as it is becoming standard in laptops today, giving mobile operators a big opportunity with Wi-Fi voice ," said Richard Webb, directing analyst for Infonetics and author of the report. "But voice over wireless Internet devices have the potential to be a hugely disruptive technology, too. One big factor is the low cost of calling, especially long distance, overseas, and during peak hours. The traditional model of time and distance-based pricing for voice calls will be eroded by VoIP, and as VoIP goes wireless, this will present a challenge not only to fixed line operators, but to mobile operators as well."

"There are technical issues to be worked through before wireless Internet calling becomes viable commercially, such as quality of service (QoS), roaming across different wireless platforms, and also the relatively short range of Wi-Fi signals," Webb continued. "But with vendors currently working towards standards to address these challenges, it is likely we will be at the foot of the adoption bell-curve by mid-2006."

The Wi-Fi Phones report tracks VoIP handsets with integrated Wi-Fi (802.11) functionality and dual-mode Wi-Fi/cellular handsets, and provides 2004 market size totals, annual revenue and unit forecasts through 2009, and analysis of the Wi-Fi phone market for all regions (worldwide, North America, EMEA, Asia Pacific, and CALA).