The worldwide wireless local area network hardware market in the first quarter of this year trumped the fourth quarter of 2003 by 2 percent, with revenues of $696.4 million, according to Infonetics Research. The industry can also expect another 2-percent growth, amounting to $713.6 million, by the first quarter of 2005, Infonetics predicted.
“What we see here is a real dramatic growth,” commented Richard Webb, directing analyst at Infonetics and author of the study. He said broadband gateways account for 72 percent of the market.
Linksys tops the market-share hierarchy, followed by D-Link, Netgear and Cisco in that order, said Infonetics. By regions, North America enjoys the largest WLAN hardware revenue; Europe, the Middle East and Africa is second; Asia Pacific is third, while the Caribbean and Latin American region brings up the rear.
WLAN hardware covers access points, switches, aggregation devices and security gateways. The report identified switch ports as standing out with a revenue rise of 121 percent.
“This is a strong quarter for wireless LAN switch vendors, with the segment showing healthy port and revenue growth. Start-ups in particular are gaining traction and have been pulling in some notable wins, not just in the U.S., but in Europe and Asia too,” said Webb.
The report identifies the small office/home office segment as well as consumers as accounting for 60 percent of the revenue, while service providers and enterprises make up 40 percent. However, the report indicates that switching and security systems will drive the greatest proportion of enterprise in the market.
The gateway segment of the industry had the great traction because of its ease of use and availability, Webb said, explaining that cable and DSL players are taking advantage of it.
Webb noted that WLAN switches are a new category, as enterprises with access points are using them because of their security capabilities. He said switches had a triple-digit growth from the previous quarter. Cisco’s entry into that space with monster sales in the first quarter makes the networking giant a legitimate player, according to Webb.
Cisco’s market share likely will increase when it includes the consumer market with the enterprise space where it currently focuses. The consumer side of the market took off first, but Webb thinks the enterprise segment will ramp up soon.
“Cisco may climb up the leaderboard as it grows,” said Webb.
He said a number of start-ups are flocking to the switch market, but they will have to confront challenges from big players like Symbol Technologies, Cisco and Proxim. He also identified other players such as Nortel Networks Ltd. and Extreme Networks. Some of the start-ups in the market include Aruba Networks, Meru Networks, Airespace, Trapeze Networks and Legra.
“It’s tough for the start-ups,” he said. “I can see one or two of them won’t make it.”
The bridges, which refer to the access points that connect one WLAN to another, suffered a dip in the market in the last quarter, the study said.
“It’s more of a growth blip,” he explained. “It does not mean it’s fading or nobody wants it. It means it won’t be that big.”
