Wireless LAN (WLAN) revenues are expected to drop 13 percent in 2024, with lower prices exacerbating depressed demand, according to a new report from Dell’Oro Group. Meanwhile, vendors sensitive to eroding prices are cutting back on some functions of their Wi-Fi 7 APs, and this is expected to increase the adoption of the new technology over the next five years.
“The digestion of previous WLAN shipments and the cautiousness of some enterprises due to macro-economic conditions has caused a dramatic drop in revenues in the past two quarters,” said Siân Morgan, Research Director at Dell’Oro Group. “We expect to see signs of recovery in 4Q 2024 once excess inventory is flushed through the system, and the market returns to demand-driven dynamics.
“IT budgets are stretched. On one hand, enterprises are under pressure to figure out how Generative AI can revolutionize their businesses. On the other hand, companies need highly performing networks to enable digital transformations. Vendors sensitive to these pressures are releasing cost-effective Wi-Fi 7 APs which will help accelerate the adoption of this latest generation of Wi-Fi,” added Morgan.
Additional highlights from the Wireless LAN 5-Year July 2024 Forecast Report:
- AIOps features are driving up license revenues and delivering significant value to enterprises facing labor difficulties.
- Wi-Fi 6E adoption is still growing but will be eclipsed by Wi-Fi 7 in 2025.
- If the closing of HPE’s acquisition of Juniper Networks is delayed due to regulatory concerns, WLAN revenues could suffer as enterprises opt to wait before buying.
- The first AP shipments of the standard expected to be branded as ‘Wi-Fi 8’ are expected in 2028 and will be focused on increasing reliability instead of expanding capacity.