What Should Investors Understand About the WiFi Industry?

We speak with David Henry, President and General Manager of Connected Home Products and Services at NETGEAR, about the WiFi industry and what the next generation of WiFi looks like. Henry also shares the top trends shaping the industry, along with the top opportunities and challenges.

How will the WiFi industry evolve in the next few years? How big is the market expected to grow?

The WiFi industry continues to evolve to meet the ever-changing demands of consumers and businesses. More and more connected devices and bandwidth-hungry applications are requiring faster-than-ever speeds and lower latency, which is spurring the evolution of networks to accommodate them. Combined with the need to work, learn, game, shop and more from just about anywhere, new online experiences and habits will push the industry.

In 2020, when we are all forced to work, school, and everything else at home, we learned quickly how dependent we were on WiFi. Because of that, consumers around the world quickly upgraded their WiFi to meet their urgent connectivity needs. We know that the average upgrade cycle for most consumer electronics (including WiFi) is around four years, so 2024 is likely time for those homes to upgrade WiFi again. This, in addition to the newly released WiFi 7 technology should provide tailwinds for the market.

What are the top trends shaping the industry today?

One of the big trends we’re seeing is the rise of mesh systems – instead of using one router to distribute WiFi throughout your home, people have been turning to mesh systems such as our Orbi which uses a router and a number of satellites to ensure you always get the best speeds anywhere in your home.

These days we’re using WiFi everywhere, not just in one room of the house. With the proliferation of smart devices, we’re finding we need strong signal at the front door for our smart doorbells to the backyard, garage, attic or accessory dwelling unit (ADU). With a single router, wireless signal degrades as it passes through walls.

Other trends include the increased demands we put on our WiFi networks – new connected devices from smart lights and cameras to smart ovens and connected refrigerators, and bandwidth intensive applications such as live video streaming and immersive gaming. In recent years, WiFi needed to support high quality video streaming of recorded content, but these days live video, which is far less tolerant of latency, is becoming the norm.

Sports events such as NFL games and cultural events are being streamed live, and gaming more frequently incorporates AR or VR. All of these require excellent connectivity for a good experience.

What does the next generation of WiFi look like and what will be the broader impact on the technology landscape?

The next generation of WiFi is here. It is called WiFi 7 – the 7th generation of WiFi, believe it or not. WiFi 7 delivers much faster speeds, lower latency and even more capacity – meaning it can support many devices and applications all pounding the network at the same time.

The impact will be profound. Google, for example, just announced they will deliver 20 Gig internet speeds. As consumers and businesses upgrade to faster and faster Internet speeds, WiFi 7 helps them get the experience they expect: streaming, gaming, working, schooling, all over their homes and offices. And the applications will continue to evolve to leverage this high-speed connectivity to create even more immersive experiences.

Where are the biggest opportunities for the industry?

Each new generation of WiFi brings new opportunity. Faster, more robust connections pave the way for new devices and applications that help us to do and experience more than we ever thought possible. These advancements also provide a reason for consumers to upgrade their networks, especially if they want to get the most of their new purchases. Those who bought the new iPhone 15 which uses the blazing fast 6Ghz frequency (like our new WiFi 7 Orbi) may also want to invest in a network that will support the features of their new phone in the way Apple intended.

Same for gamers, sports fans, film enthusiasts, who may need to consider upgrading their home network infrastructure in order to enjoy live streamed events or the latest VR games without lags or drops. Having a reliable network is also critical for businesses expecting to move high quality files securely among remote workers or field offices or those that need to support the latest devices.

What should investors understand about the WiFi industry?

WiFi is a must-have utility.  While many consumers get their WiFi routers directly from their ISPs, it is not sufficient for everyone. Those with large homes, lots of network devices, running demanding applications, or who are tired of paying the ISP equipment rental fees will continue to buy aftermarket WiFi equipment. Good enough is not always good enough, hence the growing market for premium WiFi.

This interview originally appeared in our TradeTalks newsletter. Sign up here to access exclusive market analysis by a new industry expert each week. We also spotlight must-see TradeTalks videos from the past week.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.