The Atheros AR6003 is a 5 x 5mm device that supports throughput up to 85 Mbits/s at 5 GHz using 40 MHz channels or 48 Mbits/s at 2.4 GHz using 20 MHz channels. The chip consumes 20 percent less power than Atheros' previous .11g chip for handsets.

"The trend is to have more things integrated on a single peripheral chip," said Will Strauss, principal of market watcher Forward Concepts (Tempe, Ariz.). "What's going to happen is some cellphone makers will put this [Atheros chip] in as a flagship handset at more cost because they'll have to have separate Bluetooth and FM radio chips which will add cost," he said.

The question for Atheros will be how broad the market for .11n capabilities will be in handsets. "I don't know I have anything on my cellphone that needs 40 Mbits/second, but people using video may need it," Strauss said.

Others said the nascent market for .11n chips in handsets is just beginning a rapid growth cycle. "Forty percent of all handsets sold in 2012 will have Wi-Fi, and almost all of this will be single-stream 802.11n, so, the market opportunity here is huge," said Craig Mathias, principal of Farpoint Group (Ashland, Mass.)

Atheros estimates about 10 percent of all cellphones and 90- percent of smart phones now include Wi-Fi. Broadcom and Ralink already have single-stream .11n chips, Mathias said.

Atheros will have its AR6003 in production by June. The 65nm device integrates a power amplifier and needs no external EEPROM memory. It will sell for prices similar to the company's existing AR6002 chip.

Separately, Atheros announced its AR6133, a combo Wi-Fi .11n and Bluetooth 3.0 system-in-package aimed at portable consumer devices. However, it is not suitable for cellphones because it uses a Class 2 Bluetooth die and handsets require a Class 1.5 design.