Increased Growth in European Enterprise wlan Deployment

IDC:

The Western European wlan equipment market reached a value of $1.2 billion end-user revenue in the first half of 2006. As in previous years, the majority of revenue was generated in the consumer space, and although growth in the enterprise market has been minimal in the past, demand for enterprise equipment showed increased growth over the last 12 months.

The residential market continues to be the main driver of the European wlan market, accounting for 80% of the total market. During the first half of 2006 this segment experienced 22% growth over the second half of 2005. In the first six months, 6.6 million Wireless routers/gateways were sold to the consumer market. ZyXEL successfully improved its market position in the European residential market and now holds the number 1 position, followed by Thomson and Linksys.

Although growth rates in the enterprise (including the SMB segment) are much lower than in the residential market, demand for enterprise equipment continues to see positive growth. From 2H05 to 1H06, overall revenue for enterprise infrastructure equipment increased by 14%. Demand for centralized wlan architecture in particular continued to grow in popularity, and revenue for this kind of product rose 48%, whereas revenue for decentralized architecture products fell 16% from 2H05 to 1H06. Cisco continues to be the most important player, followed at a distance by 3Com. ZyXEL also became more active in the enterprise market and successfully improved its market position from fifth to third position with a revenue share of 13%.

Vendor positions in the residential and enterprise markets are influenced by different market characteristics, and while Cisco has been dominating the enterprise segment for years, vendor positions in the consumer market tend to vary much more. In this segment, vendors usually have agreements with service providers and success is often closely connected with the service providers' success in expanding the number of broadband connections.

Western European wlan Equipment Competitive Analysis, Publ 20061013