WiFi Hit Record Volume in 1Q05; Revenue Up 20%

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Infonetics: Despite plummeting ASPs from fierce vendor competition, worldwide wireless LAN equipment revenue rose 20% to $767.6 million between 4Q04 and 1Q05, and 12.2 million units were shipped, the highest quarterly volume to date. Revenue is expected to rise another 2% to $779.6 million by 1Q06, and will hit $3.6 billion by 2008, as wireless LAN products continue to gain traction across most all product categories and across all geographic regions. Wireless LAN switch ports rose 44% to 112,000; revenue grew 13% to $52.2 million and is expected to jump to $699.2 million by 2008.

The global broadband boom continues to generate more and more demand for wireless broadband routers, which saw a massive 34% increase in revenue between 4Q04 and 1Q05, topping $328 million, and a 37% increase in unit shipments to reach 6 million in 1Q05. In 2005, new product features such as MIMO, extended range capabilities, and VoIP functionality will generate replacement purchasing, further fueling the wireless broadband router market.

The demand for wireless broadband routers continues unabated, driven by the possibilities of wireless home networking. As more and more users explore the possibilities of media download and file sharing applications they are finding that this easy-to-use device uncovers the true potential of their broadband connection. And with 802.11n and even faster throughput speeds on the horizon, the wireless router segment will ride the crest of the global broadband wave.”

1Q05 Market Highlights

• Cisco continues as the worldwide wireless LAN revenue leader, with 17% market share following its fourth consecutive $100-million-plus quarter

• D-Link jumped into second place, leapfrogging Cisco-Linksys, which is now in third, followed by NETGEAR

• Behind the 4 leading vendors, all others claim single-digit percentages of worldwide revenue, including Buffalo, Symbol, 3Com, ZyXEL, and others

• Access points account for 71% of wireless LAN equipment revenue, NICs account for 13%, and infrastructure products, including wireless LAN switches, appliances, controllers, and mesh networking gear, account for 16%

• SOHOs and consumers make up 51% of wireless LAN equipment revenue, down from 53% in 4Q04, and service providers and enterprises make up 49%

• North America accounts for 45% of wireless LAN equipment revenue; EMEA for 30%, Asia Pacific for 21%, and CALA for 4%

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