Taming the Wi-Fi Beast
By Om Malik

(Business 2.0) – Home is where the Wi-Fi is. and the more Wi-Fi you get in your home, the bigger the business opportunity becomes. With a raft of new Wi-Fi-hungry devices arriving for the holiday season, consumers could soon face a domestic broadband bottleneck. Fortunately, lots of new companies are lining up to ease the congestion.

Let's start on the "problem" side of the equation with Nokia, which is about to launch a paperback-size Linux-based handheld called the 770--the first in a new class of wireless devices tiptoeing the line between Treos and tiny tablet PCs. The gadget is a cheap, lightweight appliance that will connect via Wi-Fi to your PC and, eventually, to any device on a home network--TiVo, Xbox, digital jukebox, whatever. You'll even be able to make voice-over-Internet calls with the thing. Now imagine you have one or more of those at home, along with a Wi-Fi-connected laptop or two. Add into that broadband-sucking mix a Sony PSP (with Wi-Fi) or Microsoft Xbox 360 (which connects via--what else?--Wi-Fi) and toss in an Olive or Sonos digital music system. Suddenly, your 802.11g Wi-Fi router, which moves data at 54 megabits per second, is wheezing like a chain-smoker scaling Kilimanjaro.

Sound far-fetched? According to research firm Diffusion Group, the number of appliances using in-home high-speed networks in the United States will skyrocket from 108 million today to 254 million by 2010. That works out to about 5.4 connected devices per home. Cisco Systems chief development officer Charlie Giancarlo predicts that within five years, consumers will need speeds as high as 1 gigabit per second to handle it all--100 times faster than the old 802.11b networks.

Now a number of hardware makers are ready to step into the breach. Some new homes are being fitted with cables that can handle lightning-quick connections--90 times faster than a typical 3-Mbps cable modem. But if you're not among the lucky few, new routers about to hit the market can help you juggle all those connectivity demands. Startup Ruckus Wireless has just released a multimedia router that plugs into a set-top box and bridges the video gap between consumer electronics and PCs. "Our whole company was built around how people transport bits inside their homes," says Selina Lo, Ruckus's founder and CEO. By year's end, expect to see wireless routers capable of sending data at more than 200 Mbps, thanks to a superfast new chip from Palo Alto-based Airgo Networks. Then there's 802.11n, the next generation of Wi-Fi, due in 2006, which ought to pump data at rates as high as 250 Mbps.

The bandwidth arms race doesn't end there. All that new capacity will create still more opportunities for device makers. Imagine, for instance, a video "hub" in your home that transmits images via Wi-Fi to half a dozen cheap flat panels in any room, freed from the tyranny of coaxial cable. Philips and Sharp are already adding Wi-Fi to screens, while startup 2Wire is working with SBC to offer multimedia hubs by next year. And though profits for device makers could be years away, there are lucrative openings now for companies that can design software systems to help people manage all their media. Who knows? Maybe, as the spam says, you really can make millions at home--with a blockbuster startup.