Worldwide Wi-Fi equipment revenue hit $2.8 billion in 2004, up 15% from 2003, and units reached in 36.1 million, up 51% from 2003, as wireless LAN products continued to gain traction across all geographic regions, according to Infonetics Research's quarterly market share service, "Wireless LAN Equipment."
Unit shipments will continue growing through 2008, when they will reach 80.4 million, 123% more than 2004. Enterprise and public hotspot segments continue to fulfill their growth potential, and the already explosive consumer segment continues to grow spectacularly, with broadband users upgrading from basic wired CPE to wireless gateways.
Due to plummeting ASPs from fierce vendor competition, quarterly revenue results were stunted: Worldwide revenue dropped 21% to $619.4 million between 3Q04 and 4Q04, and the downward trend in revenue is expected to continue over the next few years. Price erosion continued for access points, wireless broadband gateways, and NICs, with 802.11b products in particular dropping dramatically in price since the launch of 802.11g.
"In 2004, wireless LANs emerged from a niche technology to become part of the IT mainstream, as well as a complement to other networking and wireless technologies," said Richard Webb, directing analyst at Infonetics and author of the report. "Competition has increased, driving prices down and spurring on further innovation in the market as wireless LANs continue to gain acceptance. The range of applications for wireless LANs is increasing, and we see VoWLAN (voice over IP over wireless LANs) and RFID tagging in particular as two of the key applications driving the next phase of growth through 2005 and beyond."
4Q04 Market Highlights
- Cisco continues as the worldwide wireless LAN revenue leader, with 17% market share following its third consecutive $100-million-plus quarter; Cisco-Linksys maintains second place with 15%, showing that if taken as a whole, Cisco has a dominant position in the overall wireless LAN equipment market
- D-Link is third in worldwide revenue share, ahead of NETGEAR by a few points
- Behind the four leading vendors, all other vendors claim a single-digit percentage of overall revenue share: Buffalo, Symbol, 3Com, ZyXEL, US Robotics, and Proxim
- SOHOs and consumers make up 52% of WLAN equipment revenue, and service providers and enterprises make up 48%
- Close to half of all WLAN equipment revenue comes from North America, about a quarter from EMEA, a fifth from Asia Pacific, and 4% from CALA
The Wireless LAN Equipment report tracks access points (standalone APs, standard and secure wireless broadband gateways, indoor and outdoor bridges), wireless LAN infrastructure (switches, gateways, controllers, appliances, wireless mesh network systems), and standard and embedded NICs. Standalone APs are broken out by SOHO/consumer vs. service provider/enterprise.
Forecasts and market share are updated quarterly and cover all regions (worldwide, North America, EMEA, Asia Pacific, CALA). Companies tracked include 2Wire, 3Com, Airespace, Ambit, Aruba Networks, Belkin, Bluesocket, Buffalo Technology, Cisco, Cisco-Linksys, Colubris, D-Link, Ericsson, Gemtek Systems, HP, Intel, Meru Networks, Motorola, NETGEAR, Nortel Networks, Proxim, Symbol, Trapeze Networks, US Robotics, ZyXEL, and others.