Wireless LAN Market 2017: Cisco's Share Drops As Competitors Gain Steam

'Uncertainty Ahead'

Cisco's share in the enterprise worldwide wireless LAN market dropped nearly 2 percent in the first quarter of 2017, while competitors including Ubiquiti Networks and Huawei gained a few points, according to new data from research firm IDC.

The combined consumer and enterprise WLAN market generated $2.15 billion in sales for the quarter, down roughly 1 percent year over year.

"A soft start to 2017 suggests uncertainty ahead for the enterprise WLAN market," said Nolan Greene, senior research analyst, network infrastructure, at IDC, in a statement. "While digital transformation projects and scheduled refreshes bode well for the rest of the year, economic concerns and geopolitical risks in certain segments may temper growth in 2017."

CRN highlights the key datapoints and top vendors in the WLAN market.

Enterprise Up, Consumer Down

Despite overall flat sales growth during first-quarter 2017, the enterprise WLAN segment grew 4.4 percent year over year to $1.24 billion. Demand for network refreshes, digital transformation initiatives and the continued maturity of Wave 2 802.11ac access points are positive indicators for stronger growth going forward in 2017, said IDC's Greene.

Revenue for the consumer WLAN market decreased 7 percent year over year to $913 million.

802.11ac Revenue Increasing

Looking at the WLAN enterprise space, the 802.11ac standard accounted for 71 percent of dependent access point unit shipments during the quarter, while also making up 85 percent of all access point revenue. Comparatively, the 802.11ac standard accounted for only 28 percent of shipments and 58 percent of revenue in the consumer segment.

The 802.11ac growth shows the continued trend of 802.11n becoming obsolete, according to IDC.

Cisco Systems

Q1 2017 Market Share: 43.4%

Q1 2016 Market Share: 45.2%

The San Jose, Calif.-based networking giant saw WLAN revenue remain flat year over year at $537 million for the quarter. Cisco's market share dropped 1.8 percent in first-quarter 2017 to 43.4 percent compared with the same quarter one year ago.

Cisco's Meraki cloud-managed WLAN portfolio is one the primary growth drivers for Cisco, which offset declines in its traditional controller-based WLAN solutions, said Greene.


Q1 2017 Market Share: 16.2%

Q1 2016 Market Share: Unknown

The only other vendor besides Cisco with double-digit share in the WLAN market is Hewlett Packard Enterprise, which acquired Aruba Networks in 2015 for $3 billion. Aruba-HPE generated $201 million in WLAN sales during the quarter to capture 16.2 percent market share. (IDC did not include HPE-Aruba market share for first-quarter 2016 because H3C China numbers were included at that time, according to IDC. Starting in second-quarter 2016, HPE and H3C networking numbers were tracked separately.)

Sequentially, Aruba-HPE increased revenue by 5.4 percent and share jumped from 13.5 percent in fourth-quarter 2016 to 16.2 percent.

Ubiquiti Networks

Q1 2017 Market Share: 6.1%

Q1 2016 Market Share: 4.3%

The San Jose, Calif.-based wireless specialist increased WLAN sales by 47.5 percent year over year to $76 million for the quarter. While Cisco's market share dropped 1.8 percent, Ubiquiti gained 1.8 percent share during first-quarter 2017 compared with the same quarter one year ago.

Ubiquiti stock hit an all-time high in February at $63.52 per share.


Q1 2017 Market Share: 5.7%

Q1 2016 Market Share: 7.7%

Brocade Communications, which acquired Ruckus Wireless last year for $1.2 billion, saw a year-over-year WLAN sales decline of 22 percent to $71 million during the quarter. Brocade-Ruckus' overall market share of 5.7 percent in first-quarter 2017 was down 2 percent compared with the same quarter one year ago.

Brocade is currently shedding business units as it prepares to be acquired by Broadcom later this summer. San Jose, Calif.-based Brocade has agreed to sell its network-edge portfolio, which includes the Ruckus Wireless and ICX Switch product families, for $800 million to Arris International. The vendor also plans to sell its data center networking business to Extreme Networks for $55 million, Brocade's Vyatta Software Platform to AT&T, and its virtual Application Delivery Controller business to Pulse Secure.


Q1 2017 Market Share: 3.7%

Q1 2016 Market Share: 1.2%

The China-based networking and telecom giant saw a whopping 230 percent WLAN revenue growth year over year to $47.5 million. Huawei's market share jumped to 3.7 percent for the quarter, up from 1.2 percent in first-quarter 2016.

Overall, Huawei has been gaining steam in the worldwide networking market. The vendor's share in the Ethernet switching market grew from 3.9 percent in first-quarter 2016 to 6.3 percent in first-quarter 2017, according to IDC, while Huawei's share in routing increased from 16.3 percent to 19.8 percent during the same time.