IDC: Enterprise WLAN market grew strongly in the third quarter

The global consumer and enterprise wireless LAN (WLAN) market grew 1.8% year-over-year and 6.7% quarter-over-quarter to $2.47 billion in the third quarter of 2016. According to IDC's Worldwide Quarterly WLAN Tracker, the enterprise segment grew 8.4% year-over-year to $1.45 billion in the third quarter, marking two consecutive quarters of strong growth. The continued growth so far in 2016 can be attributed to refresh cycles and digital transformation initiatives in many enterprises.

[[178127]]

The 802.11ac standard now accounts for 67.1% of standalone access point shipments and 80.9% of standalone access point revenues, and is beginning to show a trend of being eliminated from the mainstream enterprise market segment by 2018.

Meanwhile, the consumer WLAN market revenue decreased 6.3% year-over-year to $1.02 billion in the third quarter of 2016. The adoption of the 802.11ac standard in the consumer market is significantly slower than that in the enterprise market segment, coupled with the rapid price erosion of consumer devices. In the third quarter of 2016, the 802.11ac standard accounted for only 25.2% of shipments and 52.7% of revenue in the consumer market.

"As is customary, the enterprise WLAN market had a strong third quarter," said Nolan Greene, senior research analyst for Network Infrastructure at IDC. "In all facets of the enterprise business, mission-critical functions continue to migrate from wired to wireless networks, across vertical markets from education to hospitality. This has led to continued strength in the global enterprise WLAN market, even as other markets have softened."

From a regional perspective, the enterprise WLAN market grew most strongly in the Asia/Pacific region (excluding Japan) in the third quarter of 2016, up 28.8% year over year, with China growing 55.7% during the same period. Japan returned to growth for the first time since 2014, growing 7.4%. Western Europe grew 6.7% in the quarter, with Europe and Spain showing strong performance at 26.7% and 23.5%, respectively. Central and Eastern Europe (CEE) grew 6.3%, with the Czech Republic showing a strong performance at 67.1% year over year. The Middle East and Africa (MEA) grew 4.2% year over year, with Egypt growing 84.4% year over year. North America had a more modest growth rate of 2.7% year over year, impacted by Canada's 8.4% decline. Latin America was the only region to decline overall, down 2.9%, but Chile and Mexico performed well, growing 17.8% and 16.8%, respectively.

"As enterprises and service providers invest in mobile infrastructure upgrades and network refreshes related to digital transformation, Asia Pacific (excluding Japan) saw strong growth in the third quarter of 2016, with most other regions making similar, albeit smaller, investments," said Petr Jirovsky, research manager for IDC's Worldwide Quarterly Network Trackers. "This is almost as if WLAN and mobility for mission-critical enterprise applications are now universally accepted."

Major updates from enterprise WLAN vendors:

• Cisco's global enterprise WLAN revenue increased 0.4% year-over-year in the third quarter of 2016, with a global market share of 43.7%, which was almost unchanged from the previous quarter and decreased from 47.1% in the third quarter of 2015. IDC believes that the Meraki cloud-managed WLAN product portfolio remains Cisco's main growth driver, making up for the decline in Cisco's traditional controller-based WLAN product portfolio.
• Aruba-HPE (excluding OEM business and, starting in the second quarter of 2016, H3C's business) grew 5 percent sequentially to 14.3 percent market share, down from 14.6 percent in the previous quarter.
• Brocade-Ruckus grew 22% year over year in the quarter, with a market share of 6.7%, down from 6.8% in the second quarter of 2016 and up from 6.3% in the third quarter of 2015.
• Huawei achieved strong growth in the quarter, up 208% year-on-year, and captured 4.3% market share, up from 1.5% in the third quarter of 2015.
• Ubiquiti also achieved significant growth in the quarter, increasing 87% year-over-year and accounting for 4.3% of the market share, up from 2.5% in the third quarter of 2015.