As a follow on to last week's blog on wireline networking product market predictions I am making my 2012 predictions for noteworthy things to look for in the smaller, but faster growing wireless networking products markets.
1. By the end of 2012 the global market for wireless networking infrastructure products, including standalone network management software, will exceed $600 million. Shipments of access points and wireless modems will account for almost 72% of total on a dollar volume basis but will account for only 38.5% of unit shipments.
2. The reasons for robust growth of wireless connectivity are many and well known but I can highlight a few key ones fueling the robust growth in adoption over the forecast period. Among some of the many benefits of wireless connectivity include: improved efficiency; cost reductions; ability for install where wired solutions impractical or impossible; reduces the majority of the cabling required, thus the associated costs, which is can be more expensive to install in certain locations; wireless networking allows easier add-ons, changes and removal of functions and is perceived by many users as being more scalable, where this is most valuable where changes or expansions are frequent and expensive; greater flexibility in operations enables companies to run leaner and meaner and maintain responsiveness to changing customer and/or market requirements; increasing trust in wireless networking and technological enhancements made to overcome previous concerns over reliability, latency and security; perceived ease of implementation and lower implementation costs as well as perceived lower maintenance and installation costs; and to obtain greater mobility in industrial facilities which provide benefits of real-time response to machine problems, real-time optimization of machine performance, reduce personnel required and increase productivity, and reducing downtime of both equipment and time to repair.
3. The fastest growth in demand will come from wireless network switches which currently represent a small niche market which will grow to over 4% of the total wireless networking components segment (excluding standalone network management software) by 2015. Companies such as Motorola are developing increasing traction as companies operating in industrial facilities are both increasing their reliance on wireless connectivity and also increasing the number of devices connected to the network wirelessly.
4. Laird Technologies will remain the dominant player in antennas, representing the 3rd largest product segment under study, with almost 4x the market share of its nearest competitors in PCTEL, Nearson and Cisco. Antennas segment is forecast for above average market growth as users are expected to increasingly integrate antennas onto existing devices.
5. Cisco will remain the dominant player in overall wireless networking components shipments but that is a result of their 800 pound gorilla position in the access points segment.
6. Several other suppliers enjoy leadership positions in the other wireless networking components product segments, among them include GE, ELRPO Technologies, Prosoft Technology, Landis & Gyr, Motorola and Apprion.
7. Although there is always the chance that an acquisition might take place within the wireless industrial networking infrastructure products market, I am at still trying to think about which companies and/or product segments make the most sense for future PAC Man activity. I guess Cisco could always decide to acquire someone that will help fill a gap in their product portfolio or Belden could decide to make a quicker entrance into the wireless segment by buying rather than building their own solution(s).
8. There will be no clear dominant winners among future wireless networks supported but the largest shipment shares of wireless networking components by type of networks in 2015 reveal that 802.11g, b and n networks will be in strong demand and there will still be a sizable share of shipments with the proprietary narrow band networks for applications requiring longer distances and greater security concerns in play.
9. The five largest consuming markets of oil & gas, power generation, automotive/motor vehicle, water/waste water, and petrochemical and oil refining combined on a global basis for over 58% total 2012 shipments.
Now I am trying to think about what other predictions we can make on other industrial automation markets of interest. I welcome the opportunity to learn about any predictions you may think might come true in 2012 or beyond. I am always intrigued to learn about any rumors on which companies may be on the prowl for a new target to acquire or which supplier may be seeking out their own "white knight".