Here’s an interesting bit of data from the wild: 8 out of 10 folks that own both an iPod and a wireless router would give up their cool music tool before they'd do without their boring, clunky router. The same percentage of those sampled would also give up their home phone before they'd sacrifice their ability to surf the Web from their favorite couch. The data can be found in a survey conducted by Kelson Research for the WiFi Alliance, the consortium that promotes IEEE WiFi 802.11 standards and, more importantly, certifies compliance with them.
Surprised? Don't be, because the iPod/iTunes system comprises a closed, proprietary environment, while WiFi products are based on a continuously evolving family of open standards, and that makes a far bigger difference than you might think. If this sounds like too simplistic an explanation, consider the following:
Let's look at the numbers first (gross sales and rate of change). What we see is that there are many, many more wireless-enabled devices in the field than there are iPods. According to research analysts In-Stat, wireless chipset sales hit 140 million last year, and should reach 430 million per year in 2009, by which time there should already be over a billion chipsets still in active use. 40 million of the chipsets sold last year found their way into home and small office/home office (SOHO) routers, and another 45 million into laptops and other mobile PCs. That leaves roughly 55 million more to be incorporated into phones and other mobile devices. Moreover, that 140 million number was up 50% from the year before.
In contrast, UBS Investment Research expects iPod sales to come in about a million units under projection this year, with about 39.8 million new iPods being bought in 2006, and a flattening in iPod sales growth after rapid expansion in prior years.
While comparing music players and Internet access numbers is not a totally fair comparison, the ability of WiFi to achieve such dramatically larger sales numbers is still instructive, since few new capabilities of any kind enjoy such explosive growth. When they do, though, its often because they are based on open standards, and from two resulting, related effects: the ability and likelihood of multiple vendors to build new products, because the standard upon which the new products are based is open, and the tempting size of the market demand that can rapidly evolve because of the rich selection of competing products. The result is sometimes referred to as a "virtuous cycle" of incentives and rewards to both sides of the sales equation.