Th e combined consumer and enterprise worldwide wireless local area network (WLAN) market segments increased 0.6% year over year in the first quarter of 2015 (1Q15).
According to preliminary results published in the International Data Corporation (IDC) Worldwide Quarterly WLAN Tracker, the enterprise segment’s growth slowed significantly compared to preceding quarters, increasing just 3.0% over the same period last year. After several quarters of high single-digit growth rates, the enterprise WLAN market growth rate fell to the lowest growth level seen in years due to the confluence of two factors: education revenues in the US that are likely delayed due to the pending release of E-rate funding for K-12 public schools and general softness in the public sector and in Asia/Pacific during the first quarter of the year.
The 802.11ac standard continues on its path toward becoming the prevailing WLAN standard. After seven full quarters of product availability, the 802.11ac standard already accounts for just over 40% of dependent access point unit shipments and 55% of dependent access point revenues, representing a noticeably faster adoption rate then what we saw with the 802.11a/b/g to 802.11n transition several years ago. As Wave 2 802.11ac products emerge in the marketplace during the second half of 2015, IDC expects 802.11ac to become the predominant standard worldwide, both in terms of shipments and revenues, by 2016. Increased demand on enterprise WLANs continues to be a driving factor in this transition.
The consumer WLAN market decreased -2.0% year over year in 1Q15, reversing a trend of moderate year-over-year growth over the last several quarters. The ongoing transition from the older 802.11n standard to the newer and faster 802.11ac standard has been the driver for this segment. Worldwide consumer 802.11ac WLAN revenues grew 143.0% year over year, but only increased 2.1% sequentially, which could not offset the declines in consumer class 802.11n revenues (down -21.7% year-over-year and -14.9% quarter-over-quarter).
“From education to healthcare to large enterprise, the increasing preference for wireless network access will continue to be seen, especially as emerging Wave 2 802.11ac will enable more applications to move to wireless,” said Nolan Greene, Research Analyst, Network Infrastructure, at IDC. “While seasonality and the future release of E-rate funding slowed growth in the first quarter of 2015, we expect 802.11ac’s momentum to once again boost the market in subsequent quarters.”
From a geographic perspective, the enterprise WLAN market once again saw above-market growth rates in Latin America with its noteworthy 33.7% year-over-year growth in 1Q15. The Europe, Middle East, and Africa (EMEA) region is seeing its fourth consecutive quarter of solid growth, growing 11.5% year over year. Canada once again saw growth above the worldwide market at 7.4% year over year. The Asia/Pacific enterprise WLAN market saw moderate growth, increasing 1.9% year over year. The United States, which was impacted significantly by the public K-12 segment of the education market delaying WLAN spending due to expected 2Q15 E-Rate funding, declined -5.4% when compared to 1Q14.
“Many of the regions saw healthy growth in the first quarter as 802.11ac deployments increased and organizations worldwide are becoming more dependent upon enterprise WLANs,” said Petr Jirovský, Research Manager, Worldwide Networking Trackers. “However, weakness in the US due to postponed projects and seasonal softness had a material impact on the overall worldwide growth rate.”
Key Enterprise WLAN Vendor Updates
Cisco’s 1Q15 worldwide enterprise WLAN revenue was once again comparable to the overall market, growing 2.4% year over year, despite declining -16.0% quarter over quarter. Cisco’s worldwide market share fell slightly to 47.8% in 1Q15, down from the more than 48% share seen in the last two quarters and in 1Q14. IDC believes that the Meraki cloud-managed WLAN portfolio remains one of the primary growth drivers for Cisco.
Aruba (excluding its OEM business) was a major bright spot in a weakened 1Q15, increasing 20.1% year over year and 0.8% sequentially. Aruba’s market share jumped to 14.0% compared to 11.8% in 4Q14 and 12.0% in 1Q14.
Ruckus performed better than the market in 1Q15, growing 7.2% year over year, while dropping 5.0% quarter over quarter. Ruckus currently accounts for 6.9% of the overall market, up from 6.6% in 1Q14.
HP Networking continued to struggle as it declined 15.5% year over year and 28.2% sequentially in 1Q15. Customer uncertainty around HP WLAN given the Aruba acquisition may be playing into this decline. HP’s market share stands at 3.6% compared to 4.4% for 1Q14.