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Two analyst, two experts and top management from three sector firms examine the Wi-Fi & Wireless LAN sector in this special 27-page Wi-Fi & Wireless LAN issue from The Wall Street Transcript, available at (212/952-7433) or http://www.twst.com/info/info548.htm

TWST: What is the extent of the research in wireless LAN and Wi-Fi at Gartner?

Mr. Byrne: We probably have more analysts tracking the wireless LAN market than anyone. I try to keep an eye on end-user issues, but my primary focus is on semiconductor-related issues. We have end-user analysts and we are tracking what the vendors of equipment are doing. We are looking at the services and at the equipment that’s out there. So we have pretty much a 360-degree view. My perspective on the world is more chip-oriented.

TWST: At this point, what are the relative valuation judgments that are being made across those different segments?

Mr. Byrne: We’re at the early phase. Across the board, there isn’t a lot of maturity. There are a lot of technological advances that are taking place. Things are being done at the operating system level by Microsoft (Nasdaq:MSFT) and by the PC suppliers that are affecting how it is being adopted, whether it is being built in and how easily it can be used. Then there are the various service providers that are trying to make a go at creating public service offerings. The end-users are just getting a taste of the benefits. So we’re at the early stage of the market and there is a lot more development to be done to the winning business models across the board. It’s advancing on so many different fronts that are not quite in phase. In terms of value, like cellular, there’s a lot of value in providing the services on an ongoing basis. Then there’s a big step down in terms of the total revenue opportunity when you get to the equipment level. Then there’s another sizable step down when you get to the component level. So there tends to be more value on the services side of things. This market is a little different in that it’s going to have a lot of utility in the enterprise, which doesn’t really have that services component. It’s different in that way.

TWST: Do you have a feel for that emphasis with the companies you have on your list?

Mr. Byrne: For Intersil, obviously, wireless LAN is a big deal for them and they’re pushing that as hard as they can. If you turn to companies like Intel and Microsoft, they see wireless LAN as enabling. Maybe it’s a small piece of what they do, but it enables the big piece of what they do. It’s, as you know, another excuse to buy a computer that’s going to run Microsoft software and have an Intel processor in it. So it’s a little thing that that can be leveraged to keep the momentum going for their core products. For TI, I’m not aware of there being any issues — it is a small piece in a bigger whole. If there are any, they may just be related to product development and more basic low-level issues.

TWST: Microsoft is a player too?

Mr. Byrne: They’re doing a lot on the software front to enable enhanced security in XP and provide readiness for the products. So it was reasonable to bring them into the conversation. Obviously, they’re not providing hardware, but Bill Gates has said wireless is a key technology for the next five years. For him it’s a big deal and the company is certainly doing its best.

This special issue includes:

1) Wi-Fi and Wireless LAN Technologies - In an in-depth (3,100 words) Analyst Interview, Joseph Byrne, Industry Analyst at Gartner Dataquest, examines the outlook for the sector and shares specific stock recommendations.

2) The Applications of Wi-Fi - In an in-depth (2,600 words) Analyst Interview, Chris Sessing, Equity Research Analyst at Crowell, Weedon & Co., examines the outlook for the sector and shares specific stock recommendations.

3) Venture Capital Investment in Wi-Fi - In an in-depth (4,500 words) Expert Interview, Robert I. Theis, General Partner at DCM-Doll Capital Management and Douglas H. Klein, Chief Executive Officer of Vernier Networks, Inc., both examine the outlook for the sector.

4) CEO interviews (average 2,500 words). Top management of three sector firms examine the outlook for their firm and the sector.