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What’s Behind the Drop in Wi-Fi Equipment Sales?

September 15, 2015 By Steve Senne in

Perhaps surprisingly, the market for wireless LAN equipment was particularly weak in the second quarter of 2015, according to International Data Corporation. But fortunately for those network operators that sell WLAN equipment, the researchers believe the downturn is a temporary one.

The worldwide WLAN market decreased 5.3 percent year-over-year (YoY) in 2Q, according to preliminary results from the IDC Worldwide Quarterly WLAN Tracker.

The consumer segment of the WLAN market dropped 12.9 percent YoY in 2Q15, marking the second consecutive quarter of decline. Meanwhile the enterprise side of the market saw slow growth, rising just 1.4 percent YoY. That’s the lowest level in years, IDC highlights in a press release.

Why a Drop in WLAN Sales?

Two factors resulted in the slower growth, researchers said. One factor was economic uncertainty that led industry players to delay or postpone deployments. The other was technological change, more specifically anticipation of Wave 2 802.11ac.

With products available for two years now, IEEE 802.11ac is well on its way to becoming the new prevailing WLAN standard, IDC points out. The technology now accounts for just a bit less than 50 percent of dependent access point unit shipments and 62.8 percent of dependent access point revenues, according to IDC.

That’s a rate of adoption that’s much faster than the transition to either 802.11a/b/g or 802.11n that began several years ago. Despite this, worldwide consumer 802.11ac WLAN revenue rose only 67.6 percent YoY in the second quarter — less than half the growth rate in 1Q.

“WLAN took a bit of a hit in 2Q15, but still demonstrated strength in many key segments,” said Nolan Greene, Research Analyst, Network Infrastructure, at IDC. “The pending emergence of Wave 2 802.11ac, the steady rise of the Internet of Things in the enterprise, and the coming onslaught of E-Rate funding in the US are among the factors that may pave the way for more robust growth for the rest of 2015.”

Looking ahead, IDC expects 802.11ac will become the majority standard globally for new deployments – in number of deployments and revenues – by 2016.