Broadband Operator Competition Will Drive an Almost 50% Jump in Wi-Fi CPE Demand by 2028 as Value-Added Services Become Key Battleground

30 May 2023

The residential Wi-Fi market has been turbulent over the last few years, beset by erratic fluctuations in demand, protracted supply chain challenges, and escalating competition between Internet Service Providers (ISPs). Disruption has been magnified by transformative innovations - including the 6 GHz spectrum, Wi-Fi 6E, Wi-Fi 7, and a wealth of new Value-Added Services – alongside the injection of government funding, most notably the US$42.45 billion Broadband Equity, Access, and Deployment (BEAD) Program in the United States. With industry backlogs in decline since 3Q 2022 and demand generally becoming more predictable, the industry is now primed for these technical innovations, heightened market competition, and government support to drive strong growth in the market. ABI Research, a global technology intelligence firm, is forecasting that global Wi-Fi Customer-Premises Equipment (CPE) shipments will rise from 266.9 million in 2022 to 397.4 million in 2028 at a Compound Annual Growth Rate (CAGR) of 6.9%. Much of this growth will be driven by new Wi-Fi CPE product types like Wi-Fi Mesh and the latest Wi-Fi standards, although it is already clear that there will be some bumps down the road with Wi-Fi 7’s introduction.

“Excitement for the arrival of Wi-Fi 6E drove a spate of deployments in 2022, but then broadband operators began sidelining Wi-Fi 6E and shifted instead to gearing up for Wi-Fi 7,” says Andrew Spivey, Senior Analyst, Wi-Fi & WLAN Technologies & Markets, at ABI Research. “But don’t automatically equate Wi-Fi 7 with 6 GHz. Wary that consumers won’t have large numbers of 6 GHz-enabled devices until later in the decade, a handful of operators are drawing up plans to deploy Wi-Fi 7 equipment, which will support the legacy 2.4 GHz and 5 GHz spectrums only. The emergence of 2 variants of Wi-Fi 7 - one with and one without 6 GHz compatibility - will cause significant consumer confusion toward the new protocol early in its lifecycle.”

As competition intensifies between ISPs, differentiation through hardware alone is no longer sufficient, and software has emerged as a new front in the intense conflict. While in the past, ISP Requests for Proposal (RFPs) were typically combined requests for Wi-Fi CPE hardware and firmware, increasingly RFPs are being made solely for the hardware, with the ISP taking control of the firmware so that they can integrate advanced proprietary features. Tier 1 service providers developing their own Wi-Fi CPE firmware in-house include AT&T, Comcast, and Orange. Middleware platforms offering advanced value-added services like Wi-Fi management, parental controls, and Wi-Fi Sensing are also becoming vital for generating new revenue streams and raising the value proposition of broadband packages. Responding to this demand, a range of Wi-Fi CPE vendors, including Askey, CIG, Hitron, Sagemcom, Sercomm, Vantiva, and ZyXel, have all chosen to pre-integrate their CPE with OpenSync for instant out-of-the-box access to Plume’s Smart Home Services platform.

“With value-added services becoming increasingly integral to an ISPs value-proposition and central to the development of new business and service models, expect to see further innovations soon,” adds Spivey. “There is still much-untapped potential, from the new applications unlocked through the maturing of emerging technologies such as Wi-Fi Sensing, to the rich data available from the convergence of multiple complimentary value-added services.”

These findings are from ABI Research’s Residential Wi-Fi Infrastructure 1H 2023 Market Update report. This report is part of the company’s Wi-Fi & WLAN Technologies & Markets research service, which includes research, data, and analyst insights.

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