WLAN market on the rebound, Dell'Oro says

U.S. stimulus funds and the growth of 802.11n helped to push Q3 revenue near pre-recession levels

The wireless LAN industry nearly returned to its pre-recession health in the third quarter and is likely to achieve record revenue when the current quarter has been tallied, according research company Dell'Oro Group.

Worldwide revenue for wireless LAN equipment, not counting client devices, recovered to $US1.1 billion in the third quarter of this year, Dell'Oro said.

That was up about 12 percent from the second quarter -- 20 percent for enterprise equipment alone -- and nearly matched the $US1.14 billion of the previous year's third quarter, according to analyst Loren Shalinsky.

The WLAN business was hurt less than some others in the recession that hit hard last September, but it sent sales lower in the first and second quarters of 2009, Shalinsky said.

Before the downturn took hold, revenue had hit a record in the fourth quarter of last year, partly because of projects that had been initiated before the economy fizzled. Now the industry is on track to break that record, hey said.

Stimulus money granted by the U.S. government to help the economy back to health appears to have helped the rebound, Shalinsky said. Vendors cited stimulus funds as a driver for deals, and the government, health care and education sectors, all of which benefited from the stimulus, led the rise in sales, he said.

However, the growth of IEEE 802.11n also helped, according to Dell'Oro. The 11n standard, which boosted WLAN speed and range from the earlier a, b and g specifications, wasn't formally approved until September 2009.

But products based on a draft of the standard made up about 20 percent of WLAN units sold at the beginning of this year and now total more than 30 percent, Shalinsky said. Some enterprises hold off on buying gear until it has been standardized.

Despite price cuts made since the standard's approval, 11n gear commands a premium over the older standards. That has helped to drive up revenue, he said.

Cisco remained the dominant vendor in the third quarter with 30 percent of total revenue. Its closest rival, Netgear, had less than 10 percent of the market, Dell'Oro said.

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Stephen Lawson

IDG News Service
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