Worldwide Enterprise WLAN Market Sees Moderate Growth in 1Q17

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 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. Central and Eastern Europe (CEE) also experienced improved growth, increasing 18.6% on an annualized. 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, increasing 16.2% year over year.

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.

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.