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China Forges Ahead With Homegrown WAPI Standard Instead of Wi-Fi

China has decided to swamp its huge domestic market with WAPI-complaint products and this spells trouble for international Wi-Fi product vendors seeking to expand in China.

by / September 27, 2006
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Undaunted by the International Standards Organization's (ISO) rejection of its proposal for accepting WAPI -- China's home-grown Wireless LAN (WLAN) standard -- as an international standard, China has decided to swamp its huge domestic market with WAPI-complaint products, that could potentially not only spell trouble for international Wi-Fi product vendors, but could also rekindle the war China is waging with the developed world over imposing its own technology standards.

In a recent interview to BDA China, a Beijing-based technology consulting firm, Cao Jun the chief executive officer of IWNComm, the Chinese company that developed WAPI and vice-leader of China Broadband Wireless IP Standards Group (BWIPS) -- which is pushing WAPI for global recognition -- informed that China is taking rapid strides in promoting its home-grown WLAN within. And by end of this year, half of the new WLAN products in China is expected to be WAPI-complaint.

"IWNComm has made (sic) significant steps toward licensing, signing up original equipment makers of laptops, home electronics, small manufacturers and bigger players," Jun told BDA adding, "I believe over 50 percent of new WLAN products on the market will be WAPI-compliant by the end of 2006, driven by strong government support and demand from operators."

Experts say that along with the new policy that China announced in February that made that all government procurement of WLAN products to be WAPI compliant, a new WAPI Alliance that was set up the following month, and now an aggressive push to promote WAPI in its own market, China is all set to revive its war against the Institute of Electrical and Electronics Engineers (IEEE) 802.11 standards family [commonly referred to as Wi-Fi] it began in 2003.

"I would say that the current debate over WAPI and Wi-Fi is a war or competition between different standard groups," says Meiqin Fang an analyst with BDA, "but the Chinese government's renewed support of WAPI is just a part of China's general policy to support domestic technology standards in all high-technology industry."

Indeed the long-running saga of WAPI, or Wired Authentication and Privacy Infrastructure, is a curious case of how an obscure technical standard, that makes no difference to an end user -- after all what difference does it make whether a laptop is using WAPI or the Intel-developed and ubiquitous 802.11 WLAN standard to access the Internet at the neighborhood Starbucks -- can become a high-decibel diplomatic issue in the Chinese government's efforts to shape new technology standards for the nation's economic advantage.

WAPI became a subject of controversy in 2003 when Chinese government selected this home-grown technology and controlled by its local companies as its national standard for WLAN and mandated that all WLAN equipment sold in China be WAPI-complaint as of December that year.

This not only meant that all 802.11-compliant equipment without WAPI couldn't be sold in China, but to be able to be WAPI-complaint, international vendors had to partner with government-selected Chinese companies for accessing the secret WAPI block cipher thereby revealing their products to IPR and business risks.

Naturally most of the WLAN industry from the 802.11-compliant equipment makers and various governments opposed that regulation. In their view it "served no justifiable or sound regulatory need and erected unnecessary trade barriers." For instance Intel realized that its popular Centrino chips were not compliant with the Chinese WAPI standards, and it had no other alternative but to withdraw from the Chinese WLAN equipment market.

Eventually bowing to the legitimate concerns about hampering global trade in WLAN equipment, and to pressures from highest levels of the US as well as global 802.11--compliant WLAN equipment makers, Wu Yi, the Vice Premier of China agreed to postpone promulgation of the regulation indefinitely in March 2004. But that agreement was hardly indefinite.

China started its crusade again in July 2004 when it sought to establish WAPI as a global standard through the international standard setting procedure. Alleging that 802.11 standards "were notoriously week in security," China submitted a revised version of WAPI that month to the Joint Technical Committee, of the International Organization for Standardization and the International Electrochemical Commission (ISO/IEC JTC1) for recognition as a global standard.

Meanwhile the IEEE too filed a revised and more secure version of 802.11 standard called the 802.11i (again designed primarily by Intel) to the JTC1 for nomination as the global Wi-Fi standard. However, in the follow-on session at Frankfurt in February 2005, the Chinese delegation walked out of an ISO/ IEC JTC1 meeting alleging that the IEEE was violating ISO rules to promote 802.11i against Chinese interests.

Consequently, in October 2005 the ISO decided to select either both standards and none, or WAPI only, or 802.11i only as a global standard/s through a six-month long fast-track ballot ending March 2006. Unfortunately for China though, on March 7 the ISO members overwhelmingly accepted 802.11b and rejected WAPI.

But that hardly proved to be a solution for the warring factions. BWIPS continues attacking 802.11i alleging that IEEE has again "unjustly" and "unfairly" violated ISO rules to mislead the voters on the new international standard. It also says that 802.11i is still an "immature standard with many serious technical defects and numerous editorial errors". Supporters of 802.11i say that WAPI cannot be considered as global standard because the Chinese government has not made its algorithms public and therefore independent verification of the strength of the security is not possible.

No one knows where the WAPI saga is headed but clearly stakes are getting high for both WAPI and 802.11i equipment makers. "For the Chinese government WAPI is important because it feels WAPI is more secure than all other globally accepted Wi-Fi standards," says Meiqin Fang of BDA. And according to Cui Xiaolong of Analysys International, a Beijing-based technology advisory firm, for Chinese Wi-Fi vendors "acceptance WAPI as a global standard means a great chance to play a more important role in Wi-Fi industry chain; Chinese Wi-Fi makers could gain a position as strong as Qualcomm has had in the world."

And for all the global Wi-Fi equipment makers, the Chinese market is too huge to ignore and allow WAPI to dominate. According to a study by Deloitte Research, the Chinese Wi-Fi market is slated to be a $500-million revenue market in another six months while Analysys International, a Beijing-based technology advisory firm has predicted a Wi-Fi market of $1.25 billion by 2008.

Small wonder then that Jun and his government are determined to, as Jun says, "boost penetration" of WAPI at home, despite ISO's rejection. "Already 22 companies have joined the WAPI alliance including chipset, software, and IT/telecom equipment vendors which will also license their IPR and begin manufacturing WAPI products," Jun said.

Nevertheless, despite this intense push, WAPI may still have to struggle for a while to dominate the Chinese markets feels experts, giving some breathing space to 802.11-compliant equipment makers. "As of now most companies and manufactures would want to follow the global standard to achieve economies of scale," says Florian Pihs, Vice President of Analysys. "Some might offer special solutions for the government market, where WAPI-complaint products have been made mandatory but their consumer and enterprise push will be on non WAPI products; a market international manufactures are mainly targeting at."

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Indrajit Basu is Digital Communities International Correspondent. Photo: Shanghai, China