Reading time ( words)
The combined consumer and enterprise worldwide wireless local area network (WLAN) market segments decreased 0.8% year over year in the first quarter of 2017 (1Q17), finishing at $2.15 billion. According to results published in the International Data Corporation (IDC) Worldwide Quarterly WLAN Tracker, the enterprise segment grew 4.4% year over year in 1Q17 to reach $1.24 billion. Enterprise WLAN growth moderated in 1Q17 compared to 1Q16, when year-over-year growth registered a stronger 8.6%. However, demand for network refreshes, digital transformation (DX) initiatives, and the continued maturation of Wave 2 802.11ac are positive indicators for stronger growth going forward in 2017.
The 802.11ac standard now accounts for 70.9% of dependent access point unit shipments and 84.7% of dependent access point revenues. This points to a continued trend of 802.11n obsolescence, which is expected to be nearly complete by the end of 2018.
Meanwhile, consumer WLAN market revenue decreased 7.0% on a year-over-year basis in 1Q17, finishing at $913.0 million. In 1Q17, the 802.11ac standard accounted for just 28.6% of shipments and 58.2% of revenue in the consumer category. 802.11ac remained a bright spot in the consumer WLAN segment in 1Q17, with revenues increasing 17.6% year over year and shipments increasing 48.5% over the same period.
"A soft start to 2017 suggests uncertainty ahead for the enterprise WLAN market," said Nolan Greene, senior research analyst, Network Infrastructure at IDC. "While digital transformation projects and scheduled refreshes bode well for the rest of the year, economic concerns and geopolitical risks in certain segments may temper growth in 2017."
From a geographic perspective, the enterprise WLAN market saw its strongest 1Q17 growth coming from Latin America, which increased 28.4% year over year in 1Q17, following a 2016 where the region experienced declines in three out of four quarters. A 115.9% year-over-year increase in Mexico is the largest vector of this growth. Central and Eastern Europe (CEE) also experienced improved growth, increasing 18.6% on an annualized basis in 1Q17. A return to growth for Russia (up 49.1% year over year) was a major factor in CEE's 1Q17 growth, as was Hungary's 48.4% upswing over the same period. Asia/Pacific (excluding Japan)(APeJ) saw another strong performance in 1Q17, increasing 16.2% year over year. While most APeJ countries saw growth in 1Q17, Indonesia and Hong Kong were particularly notable (up 31.1% and 28.7% year-over-year, respectively). Japan experienced a third consecutive quarter of growth (up 11.1% in 1Q17), continuing the reversal of a multi-quarter decline trend that took place from 2014-2016.
Western Europe and the Middle East & Africa (MEA) experienced more moderate growth in 1Q17, with Western Europe increasing 2.5% year over year and MEA increasing 2.2% during the same period. In Western Europe, many countries saw strong growth, with Finland (up 23.6% year-over-year) leading the region. However, a 15.3% year-over-year decline in the UK dampened the overall growth rate. In MEA, country-level performance was wide ranging, with Egypt leading in growth (up 30.3% year over year) and Qatar recording the largest decline (down 29.9%). North America declined 2.8% year over year in 1Q17.
"The digital transformation imperative is hitting hard in emerging markets, fueling improved growth rates in key regions," said Petr Jirovsky, research manager, Worldwide Networking Trackers. "2017 will see interesting regional growth variations as economic dynamics and the worldwide political landscape pose some risk of IT market volatility."
Key Enterprise WLAN Vendor Updates:
Cisco's 1Q17 worldwide enterprise WLAN revenue increased 0.2% year over year in 1Q17. Cisco's worldwide market share came in at 43.4% in 1Q17, down from 43.6% in 4Q16, and 45.2% in 1Q16. IDC believes that the Meraki cloud-managed WLAN portfolio remains one of the primary growth drivers for Cisco, offsetting declines in its traditional controller-based WLAN portfolio.
Aruba-HPE (excluding its OEM business and excluding H3C as of 2Q16) increased 5.4% sequentially. Aruba-HPE's market share stands at 16.2% in 1Q17, up from 13.5% in 4Q16.
Ubiquiti recorded another quarter of strong growth in 1Q17, increasing 47.5% year over year. Ubiquiti accounted for 6.1% of the overall market in 1Q17, up from 5.2% in 4Q16 and 4.3% in 1Q16.
Brocade-Ruckus declined 22.1% year over year in 1Q17. Brocade-Ruckus accounted for 5.7% of the overall market in 1Q17, up from 5.1% in 4Q16 and down from 7.7% in 1Q16.
Huawei once again experienced very strong growth in 1Q17, increasing 229.7% over 1Q16, while claiming 3.7% market share, up from 1.2% in 1Q16.
The IDC Worldwide Quarterly WLAN Tracker provides total market size and vendors share data in an easy-to-use Excel Pivot Table format. The geographic coverage includes eight major regions (USA, Canada, Latin America, Asia/Pacific (excluding Japan), Japan, Western Europe, Central and Eastern Europe, Middle East and Africa) and 58 countries. The WLAN market is further segmented by product class, product type, product, standard, and location. Measurement for the WLAN market is provided in factory revenue, customer revenue, and unit shipments.
About IDC Trackers
IDC Tracker products provide accurate and timely market size, vendor share, and forecasts for hundreds of technology markets from more than 100 countries around the globe. Using proprietary tools and research processes, IDC's Trackers are updated on a semiannual, quarterly, and monthly basis. Tracker results are delivered to clients in user-friendly excel deliverables and on-line query tools.
International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,100 analysts worldwide, IDC offers global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. IDC's analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a wholly-owned subsidiary of International Data Group (IDG), the world's leading media, data and marketing services company that activates and engages the most influential technology buyers.