Enterprise Wi-Fi rollout gathers pace

16 Oct 2006

Although growth in the enterprise market for Wi-Fi has been minimal in the past, demand for enterprise equipment showed increased growth over the past 12 months, IDC said on Friday.

The western European WLAN equipment market reached a value of US$1.2bn end-user revenue in the first half of 2006.

The residential market continues to be the main driver of the European WLAN market, accounting for 80pc of the total market. During the first half of 2006 this segment experienced 22pc growth over the second half of 2005.

In the first six months, 6.6 million wireless routers/gateways were sold to the consumer market. ZyXEL successfully improved its market position in the European residential market and now holds the number one position, followed by Thomson and Linksys.

Although growth rates in the enterprise (including the small to medium-sized enterprise (SME) segment) are much lower than in the residential market, demand for enterprise equipment continues to see positive growth. From the second half of 2005 to the first half of 2006, overall revenue for enterprise infrastructure equipment increased by 14pc.

Demand for centralised WLAN architecture in particular continued to grow in popularity, and revenue for this kind of product rose 48pc, whereas revenue for decentralised architecture products fell 16pc from the second half of 2005 to the first half of 2006. Cisco continues to be the most important player, followed at a distance by 3Com.

ZyXEL also became more active in the enterprise market and successfully improved its market position from fifth to third position with a revenue share of 13pc.

“Vendor positions in the residential and enterprise markets are influenced by different market characteristics, and while Cisco has been dominating the enterprise segment for years, vendor positions in the consumer market tend to vary much more,” said Evelien Wiggers, a senior research analyst in IDC’s Telecommunications and Networking group.

“In this segment, vendors usually have agreements with service providers and success is often closely connected with the service providers’ success in expanding the number of broadband connections.””

By John Kennedy