WiFi hardware revenue up 9% in Q3 2004

Worldwide Wi-Fi hardware revenue is up 9% to $784.5 mln and units are up 31% between Q2 2004 and Q3 2004, as the key driver for Wi-Fi products, data mobility, remains strong across all segments, according to Infonetics Research. Infonetics projects over 84 mln Wi-Fi hardware units to ship in 2007, a healthy five-year CAGR of 37%, and 252% higher than 2003. Wi-Fi hardware revenue is forecast to top $3.7 bln in 2007, 49% more than in 2003. Although units will continue to grow over the next year, ASPs will be eroded by increased vendor competition, resulting in flat or marginally decreased revenue in all but a few market segments, most notably the Wi-Fi switch segment, which is growing strongly.

Cisco maintains the lead it gained in the previous quarter, with 16% of the worldwide wireless LAN hardware revenue share, following its second consecutive $100-mln-plus quarter. Linksys maintains second place with 13%. Access points account for about two-thirds of WLAN hardware revenue, NICs for under a quarter, and security gateways and WLAN switch and aggregation products make up the balance. Worldwide standalone access point revenue is up 6% from 2Q04 and service provider/enterprise AP revenue is up 9%, but SOHO/consumer standalone AP revenue is down 6%; consumers are showing a clear preference for the more flexible functionality of wireless routers and gateways above basic consumer access points. SOHOs/consumers still make up majority of WLAN hardware revenue but decreased a point in 3Q04 while revenue from service providers/enterprises increased a point. North America accounts for just under half of WLAN hardware revenue; EMEA accounts for about a quarter, followed closely by Asia Pacific at 24%