Palo Alto, CA— Because they're still at the initial stage of development, wireless technologies for industrial applications continue to make up a highly fragmented market that displays only a vague structure in terms of products, suppliers, and applications. Still, a new study by Frost & Sullivan found better growth prospects among European wireless technologies intended for industrial applications. Valued at approximately $117 million in 2002, this market's revenues are expected to quadruple between 2003 and 2006, defying adverse impacts of slowing economies.

However, Europe's wireless market still has some hurdles to overcome before it can truly prosper. Frost & Sullivan adds that user skepticism, as well as concerns about security and reliability, are the main reasons for a prevailing hesitancy about investing in wireless solutions. Widening acceptance has also been hampered by the lack of standards and limited awareness of the technology's capabilities among potential users.

Gabriela Martinho, Frost & Sullivan's industry analyst, believes that players in the device-to-device communications sector can lessen apprehension over security by educating end-users and providing continued security assurance. This restraint might still affect market growth over time, Martinho cautions, as wireless LANs become integrated in WANs, and the need for high security becomes imperative.

The study adds that interoperability of new products in the market will likely contribute to potential customers' increased confidence in the technology and consequently drive overall demand.

Martinho observes that many large automation suppliers have recently entered the market with a limited number of products, and most are still working on product development based on emerging technology standards. Automation manufacturers have been preparing for market take-off, and anticipate more stability due to standards and product development.

One of the main challenges facing companies in the wireless market is how to fine tune their solutions to specific vertical markets. So far, only a small percentage of the potential market has been targeted and, instead of focussing on specific areas, suppliers are still looking to reach the most customers.