Market Insight

RESEARCH NOTE - 802.11ac Wave 2 Is Now Making Up 10 Percent of Access Point Shipments

December 28, 2016

Matthias Machowinski Matthias Machowinski Directing Analyst, Enterprise Networks and Video

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Following is information and insight from IHS Markit about our Q4 2016 WLAN Equipment and WiFi Phones Quarterly Market Tracker, which includes data for the quarter ended September 30, 2016. 

Highlights

  • Wireless LAN (WLAN) growth continued in the third quarter of 2016 (Q3 2016), with wave 2 adoption jumping
  • Asia Pacific is the major growth region in the WLAN market in 2016
  • Huawei and Ubiquiti were the top WLAN revenue gainers on a year-over-year basis in Q3

Our Analysis

WLAN equipment sales totaled $1.4 billion globally in Q3 2016, growing 6 percent sequentially due to a seasonal pickup in demand, while the longer-term year-over-year growth rate improved to +8 percent in the third quarter, the result of strong growth in access point shipments, which are up 21 percent year-over-year.

A total of 6 million access points shipped in Q3 2016, including over 500,000 802.11ac wave 2 units. Wave 2 accounted for 10 percent of all units in Q3, nearly double Q2’s rate.

Despite strong adoption of 802.11ac and wave 2 products, average selling prices have not increased and are in fact down more than 10 percent year-over-year. Demand for WLAN is strong, but monetizing that demand has been a challenge for the last two years as organizations chose lower-cost approaches. Even so, the outlook for the WLAN market remains bright, as infrastructure investments over the long term will shift to WLAN equipment to support the rapid rise of wireless devices, both personal and for the Internet of Things (IoT), and also requirements for mobility.

Asia-Pac Growing Fast, Brexit to Drag Down EMEA

Asia Pacific was the fastest-growing region for WLAN in 2015, and that trend continues in 2016. Fiscal stimulus in China has helped drive demand.

In North America, now that the new FCC E-Rate program is up and running, WLAN sales to K-12 customers have recovered and the market has steadied. Still, growth is relatively small.

For Europe, the Middle East and Africa (EMEA), we expect lower growth in 2017 due to Brexit, followed by a resurgence in 2018 that will continue through 2020.

Huawei, Ubiquiti Top Gainers YoY

Cisco held first place for WLAN equipment revenue in Q3 2016, HPE (Aruba) was a solid number two and Brocade (Ruckus) rounded out the top three. But the top growth performers (versus a year ago) were Huawei and Ubiquiti.

Huawei has grown into major WLAN player, tripling revenue year-over-year, thanks to steady demand in its core market of China and expansion in Europe.

Ubiquiti is up 53 percent in Q3 from a year ago due to portfolio updates.

WLAN Report Synopsis

The IHS Markit quarterly WLAN equipment and WiFi phones report tracks enterprise access points by type and technology, WLAN controllers and enterprise single-mode WiFi phones. The report provides worldwide and regional market size, vendor market share, forecasts through 2020, analysis and trends.

Geography
Global
Research by Market
Enterprise & IT Mobile & Telecom
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