The Wi-Fi penetration of the consumer electronics space is going to increase sharply as smaller and cheaper chips come to market, predicts Phil Solis, Senior Wi-Fi Analyst at ABI Research. Its adoption in hand-held devices, however, has until recently been hampered by design limitations in Wi-Fi chipsets, and their relatively high power consumption.

bq. Recent breakthroughs in Wi-Fi IC design have allowed the integration of all three of the necessary subsystems — radio, baseband, and Media Access Control (MAC) onto one chip offering 802.11b and/or 802.11g communication. This has resulted in smaller ICs that use less power, especially in the “sleep” or “standby” modes that take up most of a Wi-Fi appliance’s running time. “As Wi-Fi ICs continue to solve the problem of power consumption,” said Solis, “they will find their way into smaller devices.”

The basis for Wi-Fi’s adoption in cell phones, PDAs and other portable devices lies in its increasing use in the home. Surveys indicate that in the US, about a fifth of all broadband Internet customers already employ Wi-Fi for wireless distribution of online access around the house. Increasing availability of affordable Wi-Fi handsets and services should build on that foundation. ABI Research expects strongest growth in the cell phone sector, rather than in PDAs. Handset manufacturers should be well placed to capitalize on that trend, especially given the interoperability of most portable operating systems.

Also read: Rise of the WIFi Phones