Massive Backlogs Mask a Softness in IT Spending
REDWOOD CITY, Calif. – June 6, 2023 – According to a recently published report from Dell’Oro Group, the trusted source for market information about the telecommunications, security, networks, and data center industries, enterprise-class Wireless LAN (WLAN) revenues grew 48 percent year-over-year (Y/Y) in the first quarter of 2023, fueled by high shipment volumes and increasing prices. Meanwhile, some vendors reported that backlogs came down faster than they had anticipated.
“The enterprise-class WLAN industry has not seen such a long stretch of Y/Y revenue growth in ten years,” said Siân Morgan, Wireless LAN Research Director at Dell’Oro Group. “But new orders are declining from the peaks of last year. Sky-high revenues are being fueled by the release of accumulated backlogs, and our analysis shows that this may be hiding a reduction in IT spending, with a digestion period right around the corner.
“Across the world, revenue growth varied by geography. North America has added nearly half a billion dollars to the WLAN market, while the slowest growth has been in China. Huawei has seen a considerable shift in the geographic distribution of its WLAN revenues,” continued Morgan.
Additional highlights from the 1Q 2023 Wireless LAN Quarterly Report:
- Average unit prices continued their Y/Y growth streak but are projected to start declining.
- Outdoor WLAN revenues grew as a percentage of the industry, supported by government initiatives.
- Public Cloud Managed solutions are taking market share from Premises and Private Cloud Managed solutions.
- Wi-Fi 6E Access Point shipments increased, but adoption is still lagging that of previous technologies such as Wi-Fi 6 or Wi-Fi 5.
- Meanwhile, Wi-Fi 7 APs have been announced by vendors in China and discussed in one North American vendors’ earnings call.
The Dell’Oro Group Wireless LAN Quarterly Report offers complete, in-depth coverage of the Enterprise Outdoor and Indoor markets, Wireless LAN Controllers and Licenses, with tables containing manufacturers’ revenue, average selling prices, and unit shipments by the following wireless standards: 802.11be (Wi-Fi 7), 802.11ax (Wi-Fi 6 and 6E [6 GHz]), 802.11ac (Wi-Fi 5) Wave 1 vs. Wave 2, 802.11n, and historic IEEE 802.11 standards. The Enterprise market is portrayed by Public Cloud vs. Premises and Private Cloud deployments, by geographic region, as well as by ten Vertical markets. To purchase these reports, please contact us by email at dgsales@delloro.com.
Dell’Oro Group is a market research firm that specializes in strategic competitive analysis in the telecommunications, security, enterprise networks, and data center infrastructure markets. Our firm provides in-depth quantitative data and qualitative analysis to facilitate critical, fact-based business decisions. For more information, contact Dell’Oro Group at +1.650.622.9400 or visit www.delloro.com.
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