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The combined consumer and enterprise worldwide wireless local area network (WLAN) market segments decreased 0,1% year over year in the fourth quarter of 2016 (4Q16), and increased 3,1% for the full year to finish at $2,43-billion.
According to the results published in the International Data Corporation (IDC) Worldwide Quarterly WLAN Tracker, the enterprise segment grew 3,1% year over year in 4Q16 to reach $1,41-billion, and 7,2% for the full year 2016 reaching $5,4-billion.
While growth slowed in 4Q16, a strong demand for network refreshes worldwide coupled with digital transformation initiatives carried the market to stronger growth than the 4,2% seen in 2015.
The 802.11ac standard now accounts for 65,6% of dependent access point unit shipments and 80,9% of dependent access point revenues. For the full year 2016, the 802.11ac standard accounted for 63,4% of dependent AP shipments and 78.9% of revenues. This indicates that the 802.11n standard will be nearly obsolete by 2018 in the mainstream enterprise segment.
Meanwhile, consumer WLAN market revenue decreased 4,1% on a year-over-year basis in 4Q16, finishing at $1,02-billion. For the full year, the consumer WLAN market came in at $3,98-billion, representing a decrease of 2,1% over 2015.
In 4Q16, the 802.11ac standard accounted for just 27,6% of shipments and 56,6% of revenue in the consumer category. The slower adoption of 802.11ac in the consumer segment, along with 802.11n price erosion is a contributing factor to the declining revenues in consumer-grade WLAN.
“While growth in 4Q16 is lower compared to previous quarters, IDC believes this market softness will be temporary,” says Nolan Greene, senior research analyst: Network Infrastructure at IDC. “Digital transformation efforts are continuing to take hold around the world and the market landscape is evolving so that vendors compete more nimbly to address the needs of emerging segments and use cases such as the Internet of Things.”
From a geographic perspective, the enterprise WLAN market saw its strongest 4Q16 growth coming from Asia/Pacific (excluding Japan) (APeJ), which increased 22,7% year over year in 4Q16 and 21,7% for the full year 2016. The bulk of the growth in 4Q16 accrued to China (up 41,1% on an annualized basis).
Japan experienced a second consecutive quarter of growth (up 20.2% in 4Q16), ending 2016 with a 3,4% increase over 2015.
The Middle East and Africa (MEA) increased 5,9% on an annualised basis in 4Q16 and 4,1% for the full year. Egypt led growth in MEA in 4Q16, increasing 94,9% year over year. Western Europe grew 2,1% in 4Q16 and 5,9% for the full year, with Norway up a significant 30,8% year over year.
Central and Eastern Europe (CEE) experienced a moderate 3,1% annualised decline in 4Q16, while increasing 0,9% on a full-year basis in 2016. In 4Q16, Hungary experienced the strongest growth within the region, increasing 40,6% on a year-over-year basis.
North America declined 4,3% in 4Q16, largely on a 4,9% decrease in the US during the period, but increased 4,4% for the full year.
Latin America contracted 16% in 4Q16, contributing to a full-year decline of 7,5% in 2016. Chile was the sole country experiencing growth in the region in 4Q16, increasing 9,4% year over year.
“The Asia/Pacific and Japan regions continue to be growth pacesetters as those regions embark upon their network transformation initiatives across various use cases and verticals,” says Petr Jirovsky, research manager: Worldwide Networking Trackers at IDC. “2017 should see some shifts in enterprise WLAN growth across the world as regions become more digitally mature.”
Cisco’s 4Q16 worldwide enterprise WLAN revenue decreased 0,2% year over year in 4Q16. Cisco’s worldwide market share came in at 43,6% in 4Q16, down from 43,7% in 3Q16, and 45.0% in 4Q15. 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. For the full year 2016, Cisco increased 0,9% over 2015, finishing with 44% market share compared to 46,7% for 2015.
Aruba-HPE (excluding its OEM business and excluding H3C as of 2Q16) decreased 8,1% sequentially. Aruba-HPE’s market share stands at 13,5% in 4Q16, down from 14,3% in 3Q16. For the full year 2016, Aruba-HPE’s market share stands at 14,5%.
Huawei once again experienced very strong growth in 4Q16, increasing 55,3% over 4Q15, while claiming 6,2% market share, up from 4,1% in 4Q15. For the full year 2016, Huawei increased 77,2% over 2015 and recorded a market share of 3,6%.
Ubiquiti also recorded strong consecutive growth in 4Q16, increasing 97,2% year over year. Ubiquiti accounted for 5,2% of the overall market in 4Q16, up from 2,7% in 4Q15. For the full year 2016, Ubiquiti grew 86% over 2015 and recorded a market share of 4,5%.
Brocade-Ruckus declined 20,9% year over year in 4Q16. Brocade-Ruckus accounted for 5,1% of the overall market in 4Q16, down from 6,7% in both 3Q16 and 4Q15. For the full year 2016, Brocade-Ruckus grew 2,6% and recorded a market share of 6,5%.