The race to 11ac begins - New refresh cycle set to push wireless LAN investment above US$5 billion in 2014

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Palo Alto, Shanghai, Singapore and Reading – Tuesday, 10 December 2013


Latest Canalys forecasts show wireless LAN investment will exceed US$5 billion in 2014, with the move from 802.11n (11n) to 802.11ac (11ac) kick-starting a new refresh cycle. The launch of the Wi-Fi Alliance certification program in June initiated the adoption of 11ac technology. Over 200 products have been certified, including smart phones, notebooks and access points. This has given organizations confidence to deploy 11ac networks with the reassurance of multi-vendor compatibility. But the ratification of the standard is unlikely until the first quarter of 2014. Nonetheless, vendors such as Aruba Networks, Cisco and Meru Networks have accelerated the roll-out of their first-generation enterprise-grade 11ac access points to capitalize on growing interest from early adopters.

In the third quarter of 2013, 11ac access points represented just over 5% of shipments. But total wireless LAN growth continued to decelerate, with worldwide access point and controller investment growing 14% to US$1.1 billion. This was down from growth rates of 16% in the previous quarter, 19% in Q1, and over 24% for the whole of 2012. The combination of the maturing 11n upgrade cycle and the wait for the upcoming ratification of 11ac alongside persistent challenging macro-economic conditions were the main contributing factors. Nevertheless, growth remained positive this quarter, driven by continuing roll-out and expansion of wireless networks to support higher densities of mobile devices and increasing bandwidth consumption in enterprise and service provider networks. Education, healthcare, retail and manufacturing remained key vertical sectors for wireless LAN investment.

Market leader, Cisco, which increased its share of wireless LAN shipments to 59% in Q3, took the initial approach of offering an 11ac add-on module to its Aironet 3600 series 11n customers. It has now launched the purpose-built 11ac Aironet 3700 series. Second-placed Aruba Networks, which accounted for 10% under its own brand, took an aggressive pricing approach with the launch of its purpose-built AP-225, by having price parity with its high-end 11n line. Meru Networks also took a similar approach with its AP832.

'Gaining first-mover advantage in the move from 11n to 11ac is important given the opportunity to replace wired networks in campus and office environments due to higher throughput performance,' said Matthew Ball, Principal Analyst at Canalys. '11ac notebooks have been on the market for more than a year, but it is the arrival of 11ac smart phones, including the HTC One and Samsung Galaxy 4S, and upcoming tablets that are piquing interest, especially in the education sector. These devices will increasingly proliferate in workplaces and public areas, with more people wanting to use more bandwidth-hungry applications.' In addition to supporting new devices, vendors are also promising an improvement in throughput performance for existing 11n clients with the deployment of 11ac access points to convert interest to deployments. '11ac will be deployed in high device density environments, such as campuses, stadiums, airports and retail centers, and also be used for new purposes, such as mobile backhaul traffic, wireless displays and large-scale machine-to-machine processes,' Ball added.

The migration path to 11ac, however, is not so straightforward. 'Organizations face a difficult decision. They must decide whether to be early adopters and deploy the first wave of products or wait for at least another year for the second wave,' said Phill Pexton, Research Analyst at Canalys. The second wave of access points will incorporate chipsets that support multi-user MIMO, which promises to deliver greater performance for high-density environments by using beamforming technology. The main issue is that early adopters will need to rip out and replace the first wave of access points for the second wave. 'Customers will need to work with vendors and channel partners now to formulate an appropriate wireless LAN strategy to help them migrate to 11ac and optimize their users' costs effectively. The adoption of 11ac over the next three years will be as rapid as the transition to 11n over the last three years,' Pexton added.

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About Canalys

Canalys is an independent analyst firm that strives to guide clients on the future of the technology industry and to think beyond the business models of the past. We deliver smart market insights to IT, channel and service provider professionals around the world. Our customer-driven analysis and consulting services empower businesses to make informed decisions and generate sales. We stake our reputation on the quality of our data, our innovative use of technology, and our high level of customer service.

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Palo Alto, Shanghai, Singapore and Reading – Tuesday, 10 December 2013

Latest Canalys forecasts show wireless LAN investment will exceed US$5 billion in 2014, with the move from 802.11n (11n) to 802.11ac (11ac) kick-starting a new refresh cycle. The launch of the Wi-Fi Alliance certification program in June initiated the adoption of 11ac technology. Over 200 products have been certified, including smart phones, notebooks and access points. This has given organizations confidence to deploy 11ac networks with the reassurance of multi-vendor compatibility. But the ratification of the standard is unlikely until the first quarter of 2014. Nonetheless, vendors such as Aruba Networks, Cisco and Meru Networks have accelerated the roll-out of their first-generation enterprise-grade 11ac access points to capitalize on growing interest from early adopters.

In the third quarter of 2013, 11ac access points represented just over 5% of shipments. But total wireless LAN growth continued to decelerate, with worldwide access point and controller investment growing 14% to US$1.1 billion. This was down from growth rates of 16% in the previous quarter, 19% in Q1, and over 24% for the whole of 2012. The combination of the maturing 11n upgrade cycle and the wait for the upcoming ratification of 11ac alongside persistent challenging macro-economic conditions were the main contributing factors. Nevertheless, growth remained positive this quarter, driven by continuing roll-out and expansion of wireless networks to support higher densities of mobile devices and increasing bandwidth consumption in enterprise and service provider networks. Education, healthcare, retail and manufacturing remained key vertical sectors for wireless LAN investment.

Market leader, Cisco, which increased its share of wireless LAN shipments to 59% in Q3, took the initial approach of offering an 11ac add-on module to its Aironet 3600 series 11n customers. It has now launched the purpose-built 11ac Aironet 3700 series. Second-placed Aruba Networks, which accounted for 10% under its own brand, took an aggressive pricing approach with the launch of its purpose-built AP-225, by having price parity with its high-end 11n line. Meru Networks also took a similar approach with its AP832.

'Gaining first-mover advantage in the move from 11n to 11ac is important given the opportunity to replace wired networks in campus and office environments due to higher throughput performance,' said Matthew Ball, Principal Analyst at Canalys. '11ac notebooks have been on the market for more than a year, but it is the arrival of 11ac smart phones, including the HTC One and Samsung Galaxy 4S, and upcoming tablets that are piquing interest, especially in the education sector. These devices will increasingly proliferate in workplaces and public areas, with more people wanting to use more bandwidth-hungry applications.' In addition to supporting new devices, vendors are also promising an improvement in throughput performance for existing 11n clients with the deployment of 11ac access points to convert interest to deployments. '11ac will be deployed in high device density environments, such as campuses, stadiums, airports and retail centers, and also be used for new purposes, such as mobile backhaul traffic, wireless displays and large-scale machine-to-machine processes,' Ball added.

The migration path to 11ac, however, is not so straightforward. 'Organizations face a difficult decision. They must decide whether to be early adopters and deploy the first wave of products or wait for at least another year for the second wave,' said Phill Pexton, Research Analyst at Canalys. The second wave of access points will incorporate chipsets that support multi-user MIMO, which promises to deliver greater performance for high-density environments by using beamforming technology. The main issue is that early adopters will need to rip out and replace the first wave of access points for the second wave. 'Customers will need to work with vendors and channel partners now to formulate an appropriate wireless LAN strategy to help them migrate to 11ac and optimize their users' costs effectively. The adoption of 11ac over the next three years will be as rapid as the transition to 11n over the last three years,' Pexton added.

To view and share this chart download the new Insight @Canalys app today from Apple App Store, Google Play store or as an HTML 5 web app

About Canalys

Canalys is an independent analyst firm that strives to guide clients on the future of the technology industry and to think beyond the business models of the past. We deliver smart market insights to IT, channel and service provider professionals around the world. Our customer-driven analysis and consulting services empower businesses to make informed decisions and generate sales. We stake our reputation on the quality of our data, our innovative use of technology, and our high level of customer service.

Receiving updates

To receive press releases directly, or for more information about our events, services or custom research and consulting capabilities, please complete the contact form on our web site.

For more information:

e-mail press@canalys.com

Or call:

Canalys APAC: Singapore Tel: +65 6671 9399 or

Shanghai, China Tel: +86 21 6271 1326

Canalys Americas: Palo Alto, USA Tel: +1 650 681 4488

Canalys EMEA: Reading, UK Tel: +44 118 984 0520