Report: Wireless LANs Growing, Cisco Slips

by Michael Hall

A new report shows that revenues from wireless LAN hardware continues to grow even as vendor competition drives prices down. It also shows that Cisco's lock on the top two slots in the market has been broken by D-Link.

The latest information from research firm Infonetics shows wireless revenues are up despite vendor competition.

The firm's quarterly Wireless LAN Equipment report indicates that the first quarter of 2005 saw wireless networking unit sales increase by 9 percent, breaking another record, while revenue on those sales was up by 20 percent.

Besides record-breaking revenues, the only other possible surprise of the report comes in the rankings of wireless networking vendors. Cisco held on to its lead with 17 percent of the market (and its fourth consecutive $100-million-plus quarter). Unlike last quarter, though, Cisco subsidiary Cisco-Linksys, which maintains a strong focus on home network gear, was bumped out of the number two slot by D-Link.

One other minor shift in the firm's numbers was the proportions of revenue shared by the home and enterprise markets: Last quarter SOHO and home wireless revenues totaled 52 percent of the total market, this quarter they represent 51 percent.

The biggest money in wireless LAN sales came from access points, which accounted for 71 percent of wireless LAN equipment revenue. NICs accounted for 13 percent; and infrastructure products, including wireless LAN switches, appliances, controllers, and mesh networking gear, accounted for 16 percent.

Large growth came from wireless broadband routers, which saw a 34 percent increase in revenue between the final quarter of 2004 and the first quarter of 2005; and a 37 percent increase in unit shipments, to reach 6 million in the first quarter of 2005. The company said it expects sales of those units to increase as new features, such as VoIP support and MIMO (define) drive replacement purchases.

Infonetics projects that wireless LAN revenue will rise another 2 percent by the first quarter of 2006, to total $779.6 million, and that it will hit $3.6 billion by 2008.

This article was originally published on Tuesday May 24th 2005