WLAN players predict 2010 bounce back

Wireless wonder: the worldwide WLAN market is projected to be worth $5.5bn this year

After an eventful two years which saw rampant vendor consolidation, technological standard setting and dwindling sales in an unyielding climate, analysts and channel players have asserted the wireless market is set for a landmark 2010.

The wireless LAN (WLAN) market limped into 2009, with research from In-Stat finding worldwide revenues in 2008’s closing quarter were $1.16bn (£880m at historic exchange rate). This represents a drop of 5.2 per cent sequentially and 2.4 per cent on a year-on-year basis.

The outlook worsened in Q1 2009, with figures from the Dell’Oro Group claiming a revenue slump in the enterprise market fuelled a 15 per cent quarter-on-quarter decline in global WLAN sales.

Fewer 2009 deployments
Scott Fletcher, chief executive of VAR ANS Group, agreed that last year had been a tough one for wireless resellers.

“Wireless deployments, along with unified communications, seemed to slow right down last year because it is one of those discretionary things,” he said. “But we are starting to see people look at deploying wireless again.”

Fletcher said the Manchester-based firm was exploring the possibilities of technologies such as asset tracking and infrared.

“People are looking to get more from wireless,” he added.

Research certainly indicates that the rot was beginning to stop for the WLAN market by the end of the year, with more figures from Dell’Oro revealing a record 18 million units were shipped during Q4 09.

Vendors D-Link and Netgear both enjoyed success in the small office/home office (SoHo) market, while Motorola grew enterprise revenues by two-fifths sequentially. Alcatel-Lucent also doubled its shipments of 802.11n technology, fuelling a 30 per cent revenue spike.

However, Loren Shalinsky senior WLAN researcher at Dell’Oro, offered a note of caution.

“Fourth quarter unit shipments grew dramatically, but promotional discounts in the SoHo market offset a large portion of the revenue gains,” he explained.

Last month the research house predicted that this year the market would grow to a worth of $5.5bn, outstripping its 2008 performance. The enterprise sector is projected to enjoy particularly impressive growth and is predicted to be bigger than the SoHo arena by 2014.

“Network spending slowed in 2009, but as confidence in the economy returns, we expect that businesses will return to a traditional four-year replacement cycle for their WLAN equipment,” Shalinsky added.

Bruce Hockin, head of business strategy at Motorola and Aruba distributor Avnet Technology Solutions, claimed demand from enterprise customers is starting to ramp up.

“Originally, there were pockets of requirements for wireless, maybe giving access for certain projects or hotspots in a building,” he said. “People used to look at wireless as an overlay, but now they are starting to see that it has the ability to replace the wired edge.”

In October, Motorola forged a partnership with Extreme Networks, allowing the latter to incorporate the former’s wireless technology into its wired offering.
Devin Akin, chief Wi-Fi architect at WLAN vendor Aerohive, predicted the formation of similar relationships would be a trend to look out for this year. He revealed his own firm would consider such a move.

“There are several examples of wired/wireless integration,” said Akin. “Going forward we are looking at these things, but it has to make sense, rather than saying ‘we have to partner with these guys or those guys’. If we find a wired partner (we want) to work with, we will be loo­king at that.”

SME ambitions
The SME space has been one of the toughest nuts to crack for wireless players.
Peter Newton, director of SME product marketing for vendor Netgear, claimed his firm would launch a full-blooded assault on the market.

“Wireless adoption is somewhere in the order of 30-40 per cent in the SME space,” he said.

“The enterprise players have really not created a solution specifically for that sub-500 seat market; they have serviced it through pitching their enterprise-class wares.”

The WLAN market was buoyed in September by news that the 802.11n standard had finally been ratified, more than six years after predecessor 11g was given the go-ahead.

Hockin said: “I think it has encouraged more widespread adoption. It
is providing the strong messaging that people can rely on this for high-capacity applications.”

Mark Powley, UK sales manager at Aerohive, agreed that the 11n standard’s go-ahead could give the market a shot in the arm this year.

“The main thing is people were holding back making decisions because no-one wanted to make the wrong choice,” he said. “This has allowed people to start moving.”