Asia-Pacific to propel WLAN market growth

The WiFi market experienced notable turbulence in 2023, marked by a combination of economic challenges, inventory backlogs, and sluggish adoption of 6 GHz-compatible devices. However, a significant rebound is projected in 2024, driven by several key factors. According to ABI Research, annual shipments of residential and enterprise WLAN equipment are set to exceed previous highs, reaching 294.1 million units in 2024. This forecasted recovery marks the beginning of a robust growth trajectory, with shipments anticipated to expand to 422.3 million units by 2030.

Annual shipments of residential and enterprise WLAN equipment are set to exceed previous highs, reaching 294.1 million units in 2024.

Andrew Spivey, Principal Analyst at ABI Research, emphasises the transformative changes in the WLAN equipment market: “2024 has heralded major shifts in the industry. As WiFi 6E phases out and the market transitions to tri-band WiFi 7, we are seeing a contraction in the enterprise segment. However, dual-band WiFi 7, a variant without 6 GHz compatibility, is witnessing unexpectedly strong demand.”

The advancements in WLAN technology have been buoyed by several factors, including the arrival of WiFi 7, the expansion of the unlicensed 6 GHz spectrum band, and the long-awaited certification of Standard Power 6 GHz in the USA. These developments, alongside the continued rollout of Fiber to the Home (FTTH), have opened up new opportunities for Passive Optical Network (PON) WiFi Customer Premises Equipment (CPE). Yet, despite these positives, challenges such as the global economic slowdown and persistent inventory issues have tempered market performance.

The shift towards emerging markets in Asia highlights a broader trend of regional diversification in WLAN equipment demand.

Regionally, Mainland China and North America are significant players in the WiFi market. In 2023, Mainland China led in residential WiFi CPE shipment volume with a 26.2% share of the global total. North America closely followed with a 23.8% share. Despite this, the average selling price (ASP) of units in Mainland China is nearly half that of North America, resulting in revenues that are 64.6% higher in the latter region. Mainland China’s growth is expected to slow due to market saturation, regulatory preferences for 5G over WLAN, limited access to unlicensed 6 GHz spectrum, and demographic challenges such as a declining population.

In contrast, North America is positioned for relatively faster growth. The region benefits from favourable government regulations, including full unlicensed 6 GHz access and early authorisation of Standard Power 6 GHz. North America's expanding FTTH networks also provide new growth opportunities, contributing to a more dynamic market landscape.

Emerging economies, particularly in Asia, are expected to be the primary drivers of future growth in the WLAN equipment market. While Mainland China and the Asian Tigers (including Japan) are projected to experience compound annual growth rates (CAGRs) of 3% and 3.2%, respectively, the rest of the Asia-Pacific region is set to see a robust growth rate of 15.9% from 2024 to 2030. As a key player in this region, Japan is likely to benefit from advancements in technology and infrastructure, contributing to the overall growth in Asia.

The shift towards emerging markets in Asia highlights a broader trend of regional diversification in WLAN equipment demand. As the industry adapts to these evolving trends and regional dynamics, the market is expected to experience a renewed phase of growth driven by technological innovations and expanding opportunities across diverse geographic landscapes.