LONDON — Just released market data suggests the WLAN hardware sector is enjoying buoyant growth, and that even the nascent WLAN switch market is beginning to expand rapidly.
In a report released Monday (Nov. 24) and focusing on the enterprise wireless LANs business, Datamonitor forecasts that by 2006 the sector will be worth over $1.3 billion, double its value of approximately $650 million in 2002.
North America will continue to be the leading region for revenues, though strong growth is forecast in both Europe, Middle East and Africa along with the Asia-Pacific region. The researchers also said revenue opportunities will diversify as deployments move beyond the technology's traditional target sectors of retail and manufacturing to new segments such as financial and professional services and into the education and healthcare sectors.
Datamonitor suggests schools and universities will continue to deploy WLANs as a classroom teaching tool, and to improve communication for staff and students. Hospitals will equip doctors with WLAN-enabled devices to improve levels of patient care. Datamonitor also expects strong uptake in vertical markets such as financial and professional services, with IT managers appreciating the technology's productivity benefits.
While the researchers said the largest regional market for enterprise WLAN infrastructure will remain North America, they stressed that other markets are catching up fast in terms of WLAN desployment. Datamonitor estimates that by the the end of the decade that the Europe, the Middle East and Africa together will constitute about 12 percent of global enterprise WLAN infrastructure revenues, while in 2002 this figure increased to 29 percent.
The strongest growth will come from Asia Pacific. "There has been a considerable amount of enterprise WLAN uptake in recent months in Japan and South Korea and the PWLAN market is also very advanced. Perhaps notably, price pressures in Asia Pacific have been high and consequently WLAN equipment is actually relatively better value for enterprise IT managers in comparison to their counterparts" in North America, Europe, the Middle East and Africa, the report stated.
Meanwhile, market research group Infonetics suggests worldwide wireless LAN hardware revenue topped $658 million in the third quarter, up 11 percent from the second quarter, and is projected to grow to $3.6 billion in 2006, more than doubling from $1.6 billion in 2002.
Like Datamonitor, Infonetics said growth in the enterprise sector is beginning to have a significant impact, while consumer and hotspot markets are also increasing fast.
"One of the most interesting aspects of this market is the wireless LAN switch segment, which is immature but has strong potential. Port shipments grew 95 percent to 23,000 this quarter, and revenue grew 100 percent to $12 million," said Infonetics Research's Richard Webb, lead analyst for WLANs.
"This hearty growth is due mostly to the fact that this quarter marks the first quarter of recognized shipments and revenue for several vendors. But we forecast healthy quarterly revenue and port growth in the double-digit percentages through 2004, and annual revenue and port growth in the double- to triple-digit percentages through 2006, at which time worldwide revenue for wireless LAN switches will reach $169 million".
Webb said this is a conservative forecast based on initial results, adding that if the many startups and traditional players succeed in targeting the larger enterprise market, "this figure will be much larger."
According to the latest Infonetics research, in the third quarter, Cisco remained the leading vendor with 14 percent of the worldwide total wireless LAN hardware revenue market share, and Linksys coming a is a close second with 13 percent.
The researchers said Symbol and Proxim continue to progress in the enterprise segment but without a focus on the consumer market, they lose out relative to the high-volume, lower-cost players such as Linksys, Buffalo, NETGEAR and D-Link.
Consumers are said to make up 42 percent of the wireless LAN hardware revenue, enterprises 47 percengt and service providers 11 percent. The researchers suggested this breakdown will change as enterprise-class switching and security systems drive adoption into the enterprise market, and as service providers roll out wireless hotspots in public spaces.
North America accounts for 52 percent of WLAN hardware revenue, Europe, the Middle East and Africa for 25 percent, Asia Pacific for 19 percent and other regions about 4 percent.
