How Will Cisco’s Wireless Segment Perform in Fiscal 4Q16?


Nov. 20 2020, Updated 12:28 p.m. ET

Wireless LAN market grew in 2Q16

According to IDC, the total WLAN (wireless local area network) market rose 6.7% YoY (year-over-year) and rose 6.7% on a sequential basis (quarter-over-quarter) in 2Q16. The Enterprise WLAN market rose 9.4% YoY in 2Q16.

According to Nolan Greene, Senior Research Analyst at Network Infrastructure at IDC, “recognizing the critical role that WLAN plays in IT’s mobility and digital initiatives, enterprises are committing to WLAN upgrades and refreshes.” Green also stated: “Even as global economic indicators are mixed, IDC believes that enterprises will continue to invest in robust WLAN infrastructure in order to compete effectively in the digital economy.”

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Cisco’s market share

At the end of 2Q16, Cisco Systems’ (CSCO) WLAN revenue rose 1.1% YoY, and its market share was 43.7%, as compared to 45.2% in 1Q16 and 47.3% in 2Q15. Cisco’s acquisition of Meraki is one of the key revenue and growth drivers for the firm.

Hewlett-Packard Enterprise (HPE) is another major player in this market, with a share of 14.6% in 2Q16, as compared to 15.8% in 1Q16 and 17.1% in 2Q15. Brocade-Ruckus’s (RKUS) revenues grew 7.9% YoY, but its market share fell to 6.8% in 2Q16 from 7.7% in 1Q16 and 6.9% in 2Q15.

Ubiquiti’s and Aerohive’s revenues also grew significantly YoY in 2Q16—by 95.3% and 34.1%, respectively. While Ubiquiti accounted for 4.2% of the overall market in 2Q16, Aerohive accounted for 2.7%.

Revenue rose 5% YoY in fiscal 4Q16

Meanwhile, Cisco System’s wireless business saw revenues rise 5% YoY in fiscal 4Q16. Revenues in this segment rose from $717 million in fiscal 4Q15 to $750 million in fiscal 3Q16. These revenues were driven by strong double-digit growth in the company’s cloud-based Meraki platform, partially offset by declines in its controller business.

Continue to the next part for an analysis of Cisco’s fundamentals.


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