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In a wireless network, an access point sends and receives signals to any number of other, local wireless devices. These are usually adapters and routers.
It's distinguished from a wireless router, in that it does not have a firewall, and is therefore not appropriate to protect your local network against threats from the Internet. A basic wireless setup may not have an access point, but just a router (or a modem) and an adapter. An access point extends the coverage within your network — it's put in a "dead spot", a place that's distant from the router, perhaps in a different room, or on a different floor.
The advantages of dedicated access points are easy-of-use, features, range, and throughput. Since wireless routers essentially include "access point" functionality, it's possible to take an unused router, and turn it into a wireless access point. (That is, you won't use that router's firewall features.) However, since the basic purpose of routers is not to be reconfigured as access points, this conversion may require a certain amount of expertise.
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