Local Area Network: A World Assessment

Published - Mar 2001| Analyst - Okereke Chima| Code - IFT024A
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Report Highlights

  • Asynchronous Transfer Mode (ATM) market in 2000 has been estimated as $5 billion. Although, not as popular as Ethernet, it possesses advanced quality-of-service features that make it more suitable than its competitors to carry multimedia traffic across both LANs and WANs. As explained further in the main report, it provides good competition to the high-speed Ethernet variants such as Gigabit Ethernet.
  • Token Ring market is estimated as $1.4 billion in 2000. Expected to expand at an AAGR (average annual growth rate) of 14.9%, this market will reach $2.8 billion by 2005.
  • Wireless LAN has an estimated market of $1.2 billion in 2000. Its projected average annual growth rate for 2000 to 2005 is the highest at 105%.
  • Within the next 5 years, WLAN will grow appreciably and literally explode in terms of its many and various applications.


At its beginning in the early 1980's, Local Area Network (LAN) was used simply as a network to link computers to enable them to share expensive computing resources and to provide vital information to users. However, with the advent of electronic mail, the Internet, electronic commerce, and the many e-based (that is electronic, computer, and telecommunication-based) applications, LAN and its internetworks have become so flexible that they incorporate many sophisticated technologies. Local Area Networks are no longer just a way to share information but have become also a way to do . As a result, LAN now occurs in so many variants that a study of the network has become a necessity.


A compelling reason for doing this study is to provide a ready source of information to the busy designer, industrial operator and manager. Besides, there are many vendors involved in the development of various competing network technologies that continually introduce similar and dissimilar innovative products. Such is the volume of activities on research and development, formation of alliances, and acquisitions of companies in order to possess in-house skills for new product development, that there is a proliferation of next-generation products. It is therefore the case that even an interested industry observer may have difficulty keeping up-to-date with the products and services. The objectives of this study can be summarized as follows:

  • To discuss Local Area Networks (LAN), their variants and technologies, their weaknesses and strengths, and their diverse applications.
  • To discuss their markets and commercial implications.
  • To discuss the various vendors, the strategies and operations of their companies, including acquisitions and alliances.
  • To touch on the advancements in the various LAN systems and foreseeable future directions.


Tables will constitute the basic starting point of each of the main sections and we try to make objective deductions from them. However, we do not limit explanations to the information derivable from the tables for good reasons. One of which is the fact that the LAN industry is rapidly developing; as a result, there are points that may deserve mention, which cannot be directly related to the figures on the tables. Therefore, we include such information in the section in order to provide more comprehensive and up-to-date discussion of the subject.

The method used in conducting the research involves a study and an analysis of secondary literature, and interviews with leading industry sources. Internet-based research has been of much use. The justification for this is that many organizations post up-to-date information of their activities on their Web site. Indeed on many occasions, top executives usually explain that they have placed current information on their operations on their Web site for public consumption. Once they have patented and started commercial exploitation of their groundbreaking products or services, companies are no longer secretive; rather they report_highlights and use information on such new products as tools to promote their products.

In order to guide the reader through the report, it is necessary at this point to discuss briefly its structure. The rest of the report starts with the section on summary, which contains concise information on each local area network. The Summary also provides the summary table of the report, which consists of information on sales, estimates and forecasts, for the major local area networks over the period, 1995 to 2000, and 2005.

The next section gives an overview of the industry. It covers such issues as the importance of the LAN industry and where it fits into the economy, its history and that of each network. It also describes the networks and their major applications. It tries to capture and present a glimpse of the foreseeable future developments.

The description of the structure of the industry is the subject of interest in the next section. The points considered include the profiles of companies participating in the industry, covering such features as estimates of their market shares, their relevant products and any market segments.

In the Market by Product section, which follows after, the discussion is on the market of each of the different Local Area Network. The market value is given here, and throughout the report, in U.S. dollars. Each LAN is considered as a product. Markets for applications and end users are considered thereafter. The applications include the various commercial uses of the LAN, their components, and hybrid products derived from various LAN. Values of the applications' and end users' markets in dollars are tabulated. Estimates of the market of each application and explanations for its performance are suggested.

The technology of each local area network is the next subject. While in the main, the focus of the discussion is on the physics of each technology; we shall also attempt to report_highlights their strengths and weaknesses. Within this chapter, we present a subject that should interest many industry players and observers. It is on the removal of bottlenecks in information transfer in Local Area Networks. It is a topic that has instigated many research and development activities. For it is the bottlenecks in the information transfer process that determine the speed of operations of the LAN. In effect, the development and commercialization of the Fast and Gigabit Ethernets, for example, achieve higher speed by overcoming such bottlenecks. A brief study of the international activities of the major vendors and the attendant risks of such operations constitutes the subject of the section on International aspects. Lastly, some real-life applications of LAN, more discussions on its technologies, and the acronyms in common use in the industry are the subjects in the appendix.

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