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Report: Wi-Fi Demand Up 25 Pct. in '06

Demand for microchips that help laptops, video game consoles and other gadgets connect wirelessly to the Internet pushed higher in 2006, a trade group said Monday.

But early versions of the upcoming "n" generation of wireless laptop cards and routers didn't catch on.

Global shipments of the wireless chips are expected to grow 25 percent to 200.9 million by the end of the year, compared with 160.9 million in 2005, according to figures from the Wi-Fi Alliance industry association and In-Stat, a Scottsdale, Ariz.-based research group owned by Reed Elsevier Group PLC.

Chips for Wi-Fi-enabled laptops and routers continued to make up the bulk of the category, about 75 percent in 2006.

While shipments of chips used in consumer electronics such as the Nintendo Wii video game console and Microsoft Corp.'s new Zune portable digital music player weren't enough to boost full-year figures significantly, fourth-quarter shipments indicate this category is poised for growth, according to Karen Hanley, senior marketing director of the Austin, Texas-based Wi-Fi Alliance.

Wireless chips for portable consumer electronics, which includes hand-held video games and the Zune, made up about 15 percent of shipments in 2006, down from 17 percent in 2005, In-Stat data show. Chips for stationary consumer electronics like video game consoles accounted for about 10 percent of shipments, up from 8 percent last year.

Cell phones that can use a Wi-Fi connection are also expected to take off. Data and projections from In-Stat show shipments of chips bound for dual-mode phones to grow from less than 1 percent this year to 5 percent next year, to nearly a quarter of the market in 2010.

This year, manufacturers also started shipping a new generation of chips that promised greater speed and longer reach, even though the body that governs wireless standards has yet to settle on a final recipe for the so-called 802.11n products.

Shipments of the pre-standard "n" wireless chips made up just 4 percent of the market in 2006, according to In-Stat, while the dominant "g" variety held on to a 55 percent share.

Chips that combine the older "a" technology with "g" made the biggest splash this year, taking 25 percent of chip shipments in 2006 compared with 9 percent in 2005.

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