Microsoft Exits WiFi Gear Space

Microsoft has said it will stop making high-speed wireless networking products, phasing out a family of routers and network interface cards less than two years after it entered the booming WiFi market.

Jennifer Hakes, a spokesperson with Microsoft’s external public relations agency, said the software giant is “scaling back its presence” in the category and will apply what it learned during its foray into the space “in future product offerings.”

“We went in with the intention of raising the bar on security and performance, and we think we did that,” Hakes told the E-Commerce Times. “We feel we accomplished what we set out to do, and we’ll definitely put what we learned to use in other ways in the future.”

Most of the company’s WiFi products were sold in bundles. For example, the Microsoft Wireless Notebook Kit included a base station, notebook adapter and other hardware.

Big Splash

Microsoft sold its first wireless gear in September 2002, and the Redmond, Washington-based company made a significant splash even though it did not exactly dive headfirst into the WiFi pool. For instance, it never attempted to market its products overseas, selling them only in the North American market.

In January 2003, the company captured the number two spot among WiFi gear makers — just behind Cisco and its home-networking subsidiary, Linksys — according to sales data from NPD Techworld. However, the company’s position eroded almost immediately as rivals quickly rolled out second-generation Wireless-G offerings.

Microsoft will not recall products on shelves and will honor the two-year warranties on products still to be sold. “Everything available at retailers or through our Web site will be sold and all warranties honored,” Hakes said. “It’s a phasing out.”

Changing Times?

It is possible that Microsoft sees a future in which wireless accessories become less important as more computers are made available with fully embedded wireless networking tools.

Mobile computers with such capabilities have become far more affordable in recent months. At the same time, consumer-electronics products have begun to be sold with embedded WiFi capabilities, enabling digital video recorders and other devices to be networked with PCs.

Microsoft certainly did not leave the space for lack of potential. A recent report by Cahners/InStat predicted continued double-digit growth in both units sold and revenues for WiFi firms as the technology becomes more common and less expensive.