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A novel scheme using spatial data stream multiplexing (SDSM) in the upcoming multiple-input multiple-output (MIMO)-based IEEE 802.11n physical layer is proposed. It is shown that with SDSM, the same data rate can be achieved by using less number of transmit and receive antennas and therefore this scheme can reduce the number of antennas which results in reducing mutual coupling effects, hardware costs and implementation complexities. The maximum data rates that can be achieved using a 2times2 MIMO system is 270 Mbps and for a 4times4 MIMO system is 540 Mbps. The same data rates can be achieved using the SDSM technique which reduces the 2times2 MIMO system to 1times1 SISO system and the 4times4 MIMO system to a 2times2 MIMO system.