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Modest Q4 growth for worldwide enterprise WLAN Market

Wi-Fi 6 gives current and potential boost to enterprise sector in overall disappointing WLAN market in the fourth quarter of 2019

Macro-economic issues creating headwinds for enterprise and an overall poor consumer market combined to set back the global wireless local area network (WLAN) market in the fourth quarter of 2019, according to research from IDC.

The analyst’s Worldwide Quarterly WLAN Tracker found that worldwide revenues in the combined consumer and enterprise WLAN market segments tumbled by 6.5% year-on-year in the fourth quarter of 2019 and fell by 3.9% for the full year.

But despite the overall gloomy outlook, the enterprise WLAN segment grew revenues by 1.5% year-on-year in the quarter to reach $1.7bn and by 1.8% for the full year 2019, reaching $6.2bn.

IDC noted that one of the major advancements in the WLAN market in 2019 was the introduction of Wi-Fi 6, or 802.11ax. In the enterprise segment, Wi-Fi 6 rose to make up 10% of dependent access point (AP) unit shipments and 16.7% of revenues in the fourth quarter, up from 3.2% of shipments and 6.2% of revenues in the previous quarter.

This indicates that Wi-Fi 6 adoption among enterprises has begun in earnest. The previous generation of wireless LAN standard, 802.11ac, still makes up the majority in the enterprise market, accounting for 78.4% of products shipped and 78.3% of revenues.

By comparison, and showing the strength of Wi-Fi 6 in the enterprise sector, the consumer WLAN market showed much weakness in the quarter. Revenues declined by 12% year-on-year in the fourth quarter and slid 7.8% compared with the fourth quarter of 2018. In the consumer market, 59.5% of shipments and 78.3% of revenues were for 802.11ac products.

Wi-Fi 6 has not yet penetrated the consumer market, which means 802.11n still made up a significant portion of both unit shipments (40.1%) and revenues (19.4%).

Looking at individual companies’ performances over the year in the enterprise sector, IDC noted that Cisco’s WLAN revenues decreased by 3.7% year-on-year in the fourth quarter, but it ended the year with full-year revenues 1.7% above its 2018 totals. Cisco was the clear market share leader, finishing the year with a 44.6% share.

HPE-Aruba’s fourth-quarter revenues rose by 6.1% on an annual basis and were up 1.4% for the full year. The company’s market share remained steady at 13.9% in 2019 compared with 2018. Ubiquiti’s enterprise WLAN revenues were flat year-on-year in the quarter, rising just 0.3% annually. Full-year revenues grew by 11.5%, giving Ubiquiti a 7% share to end the year.

Huawei had a strong quarter, with revenues rising by 10.6% year-on-year. For the full year, its revenues were up 9.9%, giving the company a 5.5% share to end the year. CommScope, formerly ARRIS/Ruckus, saw its revenues decline by 8.9% in for the fourth quarter and were 17.2% down on 2018 for the full year. The company ended 2019 with a 5.3% market share.

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From a geographical perspective, the enterprise WLAN market experienced mixed results across the globe, reflecting the impact of geo-political issues. The study showed the WLAN market saw strong growth in the Middle East and Africa region in the fourth quarter, increasing 12.4% year-on-year and 13.6% for the full year compared with 2018. Saudi Arabia alone grew by 22.1% year-on-year in the quarter. The US market grew by 5.4% year-on-year in the quarter and was up 3.9% for the full year. Canada’s quarterly revenues rose by 5.3%, bringing its full-year growth to 1.2%.

Excluding Japan, the Asia Pacific region was flat for the quarter, rising 0.3%, but ended the full year up 2.4%. China grew by 7% in the quarter and 6.4% for the full year. Japan’s market grew by 4% for the quarter but was down 11.2% for the full year.

The Central and Eastern Europe region saw a decline of 0.4% in the fourth quarter and ended the year at 0.1% growth. Western Europe declined by 4.3% for the quarter and 0.5% for the full year. Within that region, the UK fell by 7.1% in the quarter. The Latin American market was down 8.6% for the quarter and 7.2% for the year, while Mexico’s market fell by 16.5% in the quarter.

Brandon Butler, IDC senior research analyst, network infrastructure, said: “Enterprise WLAN market growth slowed in the latter part of 2019 due in part to macro-economic issues impacting enterprise spending, especially in Q4 19. While these results closed before Covid-19 began spreading, the concerns around it are expected to further impact the broader outlook for the market in the first half of 2020.

“Despite these near-term headwinds, enterprises will continue to invest in wireless networking technology, given its critical importance as an access connectivity method and driver of digital transformation.”

Looking at the forward prospects for WLAN in the enterprise market, Petr Jirovsky, research director at IDC’s Worldwide Networking Trackers, noted that the emergence of the 802.11ax standard has hit a turning point, with Wi-Fi 6 now being adopted by enterprises across the globe. “The enterprise WLAN market is on the cusp of a significant refresh cycle that will help propel the market’s growth in the coming quarters and years,” he said.

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