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The combined consumer and enterprise worldwide wireless local area network (WLAN) market segments declined 0.5% year over year in the third quarter of 2017 (3Q17), finishing at $2.45 billion. According to results published in the International Data Corporation (IDC) W orldwide Quarterly WLAN Tracker, the enterprise segment grew 2.8% year over year in 3Q17 to reach $1.49 billion. The enterprise WLAN market growth represents the lowest annual market increase in more than two years and a significant growth deceleration compared to the 9.4% year-over-year growth we saw in 2Q17.
Despite the weaker than expected results this quarter, IDC believes that the underlying drivers in the enterprise WLAN market remain strong and market growth will return to its normal mid- to high- single-digit range in the upcoming quarters. We expect the continuing 802.11ac standard-based upgrades that are part of the digital transformation (DX) of the enterprise to regain steam in the upcoming quarters. Meanwhile, consumer WLAN market revenues continue to struggle and decreased another 5.2% year over year in 3Q17. This was the fifth consecutive decline on a year-over-year basis for the consumer class WLAN market.
"While the enterprise WLAN market's 3Q17 performance showcased much slower growth than we have seen in a while, it's important to remember this market is still in growth mode," said Rohit Mehra, vice president, Network Infrastructure at IDC. "Even with the advent of other emerging wireless technologies, WLAN is a foundational connectivity technology, a critical enabler of end-to-end digital transformation and Edge IT and IoT strategies as wireless applications and services continue to unlock new business outcomes."
From a geographic perspective, the enterprise WLAN market saw its strongest 3Q17 growth coming from the Middle East and Africa (MEA), which increased 12.9% year over year in 3Q17. Latin America (LA) grew 10.8% year overyear in 3Q17, a nice rebound from the anemic 1.3% year-over-year increase in 2Q17. The Asia/Pacific (excluding Japan)(APeJ) region also performed well with its 10.3% year-over-year increase in 3Q17. Japan and Western Europe experienced solid results in 3Q17 and grew 8.7% and 8.6% year over year, respectively. The Central and Eastern Europe (CEE) increase of just 5.5% year over year represented a significant growth deceleration compared to the 19.8% year-over-year increase in 2Q17. The main culprit behind the weak global market results was North America. North America performance lagged the other key regional markets significantly and declined 5.6% on an annual basis in 3Q17. The significant but somewhat lumpy education segment in United States, especially the K-12 sub-segment (along with its E-rate program), was one of the key reasons behind the relatively weak overall market performance.
"We continue to see a consolidation around 802.11ac based wireless deployments, with older technologies mostly limited to a few price-conscious emerging market sub-regions," said Petr Jirovsky, research manager, Worldwide Networking Trackers. "Aside from the ongoing DX trends, enterprises are also looking closely at software-defined and cloud-managed architectures for their wireless deployments to give them the best in integrated network and security functions."
Enterprise WLAN Company Highlights
Cisco's 3Q17 worldwide enterprise WLAN revenue increased 5.3% year over year in 3Q17, above the overall market. Cisco's worldwide market share came in at 44.7% in 3Q17, up from 43.2% in 2Q17, and 43.7% in 3Q16. 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.
HPE-Aruba (excluding its OEM business) declined 1.7% year over year in 3Q17 and 19.9% sequentially from the record 2Q17, as a number of deals got delayed to next quarter. HPE-Aruba's market share stands at 13.7% in 3Q17, down from 14.3% in 3Q16.
Brocade-Ruckus was down 9.7% year over year in 3Q17, while growing 3.2% sequentially. Brocade-Ruckus accounted for 5.9% of the overall market in 3Q17, up from 5.8% in 2Q17 and down from 6.7% in 3Q16.
Ubiquiti recorded another quarter of strong growth in 3Q17, increasing 28.1% year over year. Ubiquiti accounted for 5.3% of the overall market in 3Q17, up from 4.3% in 3Q16.
Huawei increased 20.1% year over year in 3Q17 and 11.9% sequentially. Huawei now accounts for 5% of the market, up from 4.3% in 3Q16.
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 8 major regions (USA, Canada, Latin America, AP 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.