Worldwide Enterprise WLAN Market Growth Accelerated in Q4 and the Full Year 2018

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The combined consumer and enterprise worldwide wireless local area network (WLAN) market segments increased revenues 8.9% year over year in the fourth quarter of 2018 (4Q18) and 4.3% for the full year, according to results published in the International Data Corporation (IDC) Worldwide Quarterly WLAN Tracker. The enterprise segment grew 10.3% year over year in 4Q18 to reach $1.7 billion and 7.1% for the full year 2018 reaching $6.1 billion. That compares with a year-over-year growth rate of 9.8% in 3Q18 and full-year growth rates of 5.7% in 2017 and 7.2% in 2016 for the enterprise segment.

In 4Q18 the 802.11ac standard accounted for 86.8% of dependent access point unit shipments and 93.7% of dependent access point revenues. For the full year 2018, the 802.11ac standard made up 85.7% of dependent access point shipments and 94.4% of revenues. Some vendors have already begun releasing products based on the newest wireless standard, 802.11ax, also known as WiFi 6, with shipments of the product expected to ramp up throughout 2019 and 2020.

Meanwhile, the consumer WLAN market had mixed results. Revenue rose 6.9% on a year-over-year basis in 4Q18, finishing at $1.1 billion. But for the full year, the consumer WLAN market grew only 0.2%. In 4Q18, the 802.11ac standard accounted for 54.3% of shipments and 76.8% of revenue in the consumer category.

"2018 saw increased growth in the enterprise segment of the WLAN market compared to 2017, driven by a combination of factors, but none bigger than organizations continuing to realize the technological and business benefits that investments in wireless LAN infrastructure can enable," said Brandon Butler, senior research analyst, Network Infrastructure at IDC. "As the market shifts its focus to 2019, it will be a year of innovation with a new WiFi standard hitting the market and enterprises continuing to invest in software-based management platforms. These trends provide significant opportunities for vendors around the globe."

From a geographic perspective, the WLAN market saw strong growth in the Middle East and Africa region in 4Q18, which increased 20.0% year over year and 10.9% for the full year compared to 2017. The United Arab Emirates was a standout in the region, growing 25.5% year over year in 4Q18. The Asia/Pacific (excluding Japan) (APeJ) region increased 7.3% year over year in 4Q18 and was up 7.6% for the full year. Standouts in the region included the People's Republic of China, which rose 6.1% year over year and 9.9% for the full year, and India, which was up 53.9% year over year in 4Q18, powering the country to a 37.1% increase in 2018 compared to the prior year. Japan rose 18.2% year over year in the quarter and 26.0% for the year.

The Central & Eastern European region grew 19.7% year over year in 4Q18 and was up 15.8% for the full year. Russia, the region's largest market, rose 12.1% year over year while Poland was up 32.6%. The Western European region grew 12.4% year over year in 4Q18 and 5.6% for the full year. Spain increased 20.6% year over year in 4Q18 while the United Kingdom declined 8.8%. The Latin America region was down 4.8% year over year in the quarter, but grew 3.1% for the full year compared to 2017. The United States, which accounted for 36.3% of worldwide revenues in 2018, had mixed results. Sequentially, U.S. revenues were down 7.5% in 4Q18 compared to 3Q18 but rose 9.9% compared to 4Q17. Overall, the U.S. enterprise WLAN market grew 4.8% in 2018.

"The enterprise WLAN market finished 2018 strong with 10% year-over-year growth in the fourth quarter compared to the same time period last year," noted Petr Jirovsky, research manager, Worldwide Networking Trackers. "After a somewhat sluggish start to 2018, the second half of the year saw solid growth rates, which in turn contributed to overall growth in the market in 2018. While results were mixed around the world, both mature and emerging countries continue to invest in WLAN infrastructure."

Key Enterprise WLAN Vendor Updates:

• Cisco saw its worldwide enterprise WLAN revenues decline 2.3% sequentially from the third to fourth quarters of 2018, but they were positive on a year-over-year basis, up 13.5% to $734.0 million. For the full year, its revenues were up 9.8% in 2018 to $2.73 billion. The company remains the comfortable market share leader, finishing the year with 44.7% share, compared to 43.6% share in 2017.
• HPE-Aruba revenues rose 3.4% sequentially and 20.8% year over year in the fourth quarter to $233.3 million. For the full year, revenues were flat, down 0.1% to $851.5 million, giving the company 13.9% market share.
• ARRIS/Ruckus saw its revenues decline 13.2% quarter over quarter in 4Q18 and increase 1.0% on a year-over-year basis. For the full year, its revenues were up 19.0% giving the company 6.5% market share. During the fourth quarter of 2018 a preliminary deal for CommScope to purchase ARRIS, and in turn Ruckus, was announced, but it has not yet been finalized.
• Ubiquiti rose 7.9% sequentially and 33.2% year over year in 4Q18 to $113.4 million. For the full year, revenues rose 22.9% to $391.4 million, representing 6.4% market share.
• Huawei had a strong quarter with revenues in the fourth quarter of 2018 rising 34.1% from the third quarter and up 9.1% from the same quarter a year earlier. For the full year, its revenues rose 11.1% to $314.2 million, giving the company 5.1% market share to end 2018.

The IDC Worldwide Quarterly WLAN Tracker provides total market size and vendors share data in an easy-to-use Excel Pivot Table format. The geographic coverage includes eight major regions (USA, Canada, Latin America, AP excluding Japan, Japan, Western Europe, Central and Eastern Europe, Middle East and Africa) and 58 countries. The WLAN market is further segmented by product class, product type, product, standard, and location. Measurement for the WLAN market is provided in factory revenue, customer revenue, and unit shipments.

About IDC Trackers

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About IDC

International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,100 analysts worldwide, IDC offers global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. IDC's analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a wholly-owned subsidiary of International Data Group (IDG), the world's leading media, data and marketing services company that activates and engages the most influential technology buyers.