Report: Rough Transition To 802.11n Impacts WLAN Revenues In Q4 2007

Redwood City, CA -- According to a recently published report from Dell'Oro Group, the trusted source for market information about the networking and telecommunications industries, the Wireless LAN market grew just 4 percent sequentially in the fourth quarter of 2007, as both the SOHO and enterprise segments were negatively affected by the transition to 802.11n. In the fourth quarter of last year, the enterprise wireless LAN market contracted 4 percent sequentially to $375M, although it was up 10 percent compared to the same quarter in 2006.

"The contraction in 4Q07 was the product of two primary trends," said Greg Collins, Vice President at Dell'Oro Group. "First, the economic slowdown in North America delayed upgrade and expansion projects. Second, the advent of 802.11n-class enterprise products caused enterprises to take more time in testing and evaluating the new equipment," he added.

Another factor affecting the SOHO market was the slower-than-expected uptake of 802.11n products. In the last quarter of 2007, just 18 percent of SOHO wireless router shipments were 802.11n, which was a result of their being about twice as expensive as 802.11g products. We expect that new products introduced in early 2008 will cause the price premium for 802.11n versus 802.11g to decline and that by the end of this year, nearly 40 percent of SOHO wireless routers shipped will be 802.11n.

SOURCE: Dell'Oro Group