However, the firm noted that enterprise wireless LAN backlogs will balloon to over 100% of revenues in 2022, which will make companies inventive in their search for Wi-Fi coverage.

A boost in unit shipments is not expected until late 2023, with a return to normal unit growth still two years away, Dell’Oro Group said.

“Our recent interviews have revealed that the lead time for receiving wireless LAN access points has stretched to between six months and a year – a significant change from the ‘weeks-to-months’ that enterprises were waiting at the end of 2021,” said Dell’Oro Group wireless LAN research director Siân Morgan.

“Supply constraints have shifted, including not just the main Wi-Fi chips but also secondary or even tertiary components. With a limited ability to fulfil the orders flooding in, manufacturers will focus their late 2022 and early 2023 shipments on working down outstanding backlogs: mainly orders for Wi-Fi 6. Unit shipments should start to loosen up later in 2023, about the time Wi-Fi 7 appears on the market.”

“Enterprises are going to creative lengths to procure Wi-Fi solutions, such as prolonging existing support contracts, using older equipment or even repurposing consumer-grade routers. Systems integrators are recommending ways to enable more applications, squeezing more value from the existing network infrastructure. In sum, now is a time characterised by invention,” added Morgan.

The Wireless LAN July 2022 F-Year Forecast Report highlighted the following findings:
1. A calculation on published backlog levels of manufacturers outside China reveals order books swell to over ten times their normal level, exceeding the size of their annual revenues.
2. This year’s market growth of 9% will be mainly fuelled by price increases, with unit shipments remaining constrained. Increased prices will boost 2023 revenues as manufacturers pass on higher costs, but price erosion will begin to take hold in 2024 and beyond.
3. The first enterprise-class Wi-Fi 7 shipments in the fourth quarter of 2023 are predicted to dampen the take-up of Wi-Fi 6E.
4. While the adoption of public cloud-managed Wireless LAN will expand, a substantial portion of customers will prefer private cloud and on-premises solutions as enterprises re-evaluate their cloud strategy.

This first appeared in the subscription newsletter CommsWire on 11 August 2022.