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Insights Tag: NETGEAR

Netgear Q2 Gets Premium Push, Inventory Stabilization Seen in Q3

  • Netgear’s Q2 2023 revenue declined 22.3% YoY to $173.4 million.
  • Inventory correction in H1 2023 totaled $66 million.
  • Orbi, Nighthawk, 5G mobile hotspots and Pro AV will drive revenues in Q3 2023.
  • Netgear expects the Q3 2023 revenues to be in the range of $175-$190 million.

 

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Netgear’s revenue declined 22.3% YoY in Q2 2023 to $173.4 million, coming at the higher end of the guidance primarily due to an increase in orders from the service provider channel. The company experienced an inventory correction worth $29 million in Q2 2023, taking the H1 2023 inventory corrections to $66 million. As the inventory levels begin to stabilize, we expect the inventory spills will be 20% lower in H2 2023 compared to H1 2023.

Premium offerings, Pro AV switches shine amid revenue declines in both segments

  • Connected home and SMB (small and medium business) segments suffered declines of 24% and 21% YoY, respectively, in Q2 2023 primarily due to inventory corrections at channel partners.
  • Gross margin continued to be above 30% in the second quarter as premium product sales grew and freight costs went down.
  • However, the operating margin continued to be in the negative region as inventory correction amounted to over $29 million. It is expected to improve in Q3 with an improved mix of higher-ASP products in the connected home and SMB segments.
  • The retail market is starting to stabilize with consumer demand increasing toward premium networking equipment as the number of Wi-Fi-enabled devices continues to increase. As home networks become more crowded with bandwidth-hungry devices, the demand for Mesh routing devices will increase with time to ease out home networks.

Netgear Revenue by Segment, Q1 2020 - Q2 2023

  • The end consumer devices have become more feature-rich, especially with AI (artificial intelligence) which now requires more bandwidth, low latency and more reliable Wi-Fi connection. This has led to strong consumer demand for premium routers offering such features.
  • The Orbi and Nighthawk series of routers continued to perform well for Netgear along with 5G mobile hotspots and experienced a YoY increase in shipments in Q2 2023.
  • Pro AV-managed switches continued to outperform other end devices in the SMB segment to deliver a growth of more than 40% YoY in Q2 2023. Netgear is significantly committed to building leadership in IP-over-AV switches and continues to invest more to grow this segment.
  • Other SMB products experienced a major drop in sales due to macroeconomic headwinds affecting enterprise spending in the past couple of quarters, delaying the upgrades to newer Wi-Fi technologies.

Netgear Revenue by Region, Q1 2020V- Q2 2023

Revenues from service providers, in APAC and Europe decline significantly

  • Though service provider revenue increased sequentially in Q2 2023 to $25 million, it suffered a decline of 30% YoY. Revenues were at the higher end of the guidance due to an increase in orders from a major service provider.
  • Netgear shipped around 6 million units of wired and wireless networking devices, compared to 2.2 million in the same period last year. It shipped around 426,000 units of all types of routers and gateways.
  • Sales in APAC and Europe declined 20% and 40% YoY, respectively, due to an economic slowdown in these regions, especially Greater China and South Korea.

Paid subscribers to reach 875,000 by year-end, inventory corrections to stabilize

  • Netgear is on the path to achieve a paid subscriber base of 875,000 by the end of 2023 as it touched 800,000 in Q2 2023. Revenue from subscriptions grew 8% YoY in Q2 2023 to end at $10.3 million.
  • With concerns about internet security on the rise, especially with a growing number of smart devices, online internet security software is expected to gain momentum in the second half of this year.

Netgear expects the revenue to be in the range of $175 million to $190 million in Q3 2023, as inventory correction is expected to ease out. However, it will still take two more quarters for Netgear to bring down inventory-carrying levels to less than 10 weeks.

Netgear paid subscibers

Key takeaways

  • Counterpoint expects an increase in shipments for 5G mobile hotspots in H2 2023 as the consumer demand for such products is on the rise. Netgear is expected to launch a couple of Wi-Fi 7 Orbi Mesh routers and quadband Nighthawk routers in Q3 2023.
  • However, Wi-Fi 7 upgrade cycle is expected to begin sometime in mid-2024, as IEEE is yet to announce the schedule of the certification program for Wi-Fi 7. Therefore, Wi-Fi 6/6E is expected to form more than 50% of the market in the next two years.
  • Netgear is expected to open more company-owned premium retail outlets which will help it to provide a better customer experience and a competitive edge in the market.
  • Consumer awareness around online internet security remains low. Netgear can play a part in increasing consumer awareness through its D2C (direct-to-consumer) communication channels.
  • Macroeconomic headwinds have slowed down enterprise spending, thus delaying the Wi-Fi upgrade cycle toward Wi-Fi 6/6E.
  • 5G FWA market has been performing well across most of the regions. With more regions opting to reduce the digital divide through FWA, the market promises to offer further growth and become a challenger to fixed broadband technologies.

Related Research

Netgear Q1 2023: Revenue Stutters as Inventory Correction Set to Spill Into Q2

  • Netgear’s Q1 2023 revenue declined 27.4% YoY to $180.9 million.
  • SMB segment revenue declined 2.6%, the first drop in eight quarters.
  • Connected home product (CHP) segment revenue declined by over 27% YoY.
  • Netgear expects the Q1 2023 revenues to be in the range of $150-$165 million.

Netgear’s revenue declined 27.4% YoY in Q1 2023 to $180.9 million, which was below the guided level mainly due to inventory corrections in the consumer and SMB segments. These corrections are expected to continue in Q2 2023, thus requiring lower production for Netgear. However, gross margins improved in Q1 on the good performance of premium products such as Orbi mesh gateways, 5G mobile hotspots, and Pro AV switches. Supply chain issues have improved for most of the product lines which helped reduce the use of air freight, thereby helping gross margins.

SMB declines for the first time in eight quarters

  • The SMB segment ended Q1 2022 at $78.2 million, a decline of 3% YoY from Q1 2022. The revenue drop was mainly caused by inventory corrections at Netgear’s largest e-commerce account.
  • Pro AV switches, a major revenue driver in the SMB business line, grew more than 50% YoY in Q1 2023.
  • The broadcasting and studio industry is transitioning from analog to high-resolution digital over IP solutions, which is fueling demand for IP switches and creating a market opportunity for Netgear.
  • Netgear has partnered with over 200 manufacturers to increase and stabilise its supply of Pro AV switches. It is focused on developing budget and high-speed ports such as 25 Gbps or above to cover future demand.
  • Netgear expects channel inventory to stabilise for SMB by the second half of the year. Revenue from SMB is expected to overtake the connected home product segment later this year, which will boost the company’s overall gross and operating margins.

Netgear Revenue by Region Q1 2019-Q1 2023, Counterpoint Research

Connected home segment transition to premium continues

  • The connected home segment contracted by 21% in Q1 2023, as channel inventories were reduced sharply for major products among key service provider accounts.
  • The macroeconomic headwinds and declining demand hit the retail consumer networking market, resulting in poor sales in the low- and mid-price segments.
  • Channel partners are expected to further reduce inventory levels, which is leading to production cuts at several of Netgear’s manufacturing partners.
  • However, the Orbi premium mesh Wi-Fi access points continue to beat expectations along with 5G mobile hotspots, resulting in higher shipments.
  • Netgear remains committed to delivering the latest technology for consumers. It has launched a Wi-Fi 7-based router with a maximum download speed of 19,000 Mbps across three bands.

Service provider revenue declines by a quarter

  • Service provider revenues declined to $14 million as customers focused on burning inventory rather than restocking.
  • To offset this decline, Netgear pushed the unlocked version of M6 5G mobile hotspots in various countries across Europe. Netgear plans to offer it in the US in Q2.
  • 5G mobile hotspots have been performing well for Netgear in the past couple of quarters, showing a sharp YoY growth. The higher ASP of these products has helped Netgear improve its margin coupled with better performance and reliability.

Netgear Revenue by Region Q1 2019-Q1 2023, Counterpoint Research

Shipments decline by 25% YoY, COVID hits APAC revenues

  • Netgear shipped around 1.8 million units of wired and wireless networking devices, compared to 2.4 million in the same period last year.
  • It shipped around 485,000 units of all types of routers and gateways. Wired devices overtook wireless devices for the first time, driving the revenues with a 56% share.
  • Revenue from Europe grew 6% while that from the Americas declined 16%. The APAC region performed poorly, declining 32% mainly due to the COVID-19 surge in China in the early part of Q1 2023, resulting in a slowdown in China, Hong Kong, and South Korea.

Losses continue, but improvements visible

  • Even though the gross margin improved and exceeded 30%, the lower top line weighed on the overall financials, meaning the operating margins remained negative but were improving.
  • The supply chain improved a lot in Q1 2023 for most products, reducing the reliance on costly air freight.
  • Netgear is committed to improving margins by offering more premium products and aligning the marketing spends accordingly.

Netgear Paid Subscribers Q1 2021-Q1 2023, Counterpoint Research

Strong growth in paid subscribers

  • Netgear concluded Q1 2023 with 775,000 paid subscribers, a 23% increase over Q1 2022. Software subscription services such as Pro Support, Armour, and smart parental controls have done well in terms of increasing service revenue.
  • Netgear’s services revenue increased by 7.9% YoY in Q1 to $9.6 million.

Inventory correction to continue in Q2 2023

  • Netgear expects strong demand for its SMB products, especially Pro AV switches, and premium consumer products such as Orbi 8 and 9 mesh gateways and 5G mobile routers in the coming quarters.
  • However, it is expected that its channel partners will continue to focus on inventory reduction in a similar manner as in the first quarter, which will result in an expected revenue of $150-$165 million.
  • In the third quarter, Netgear will debut a Wi-Fi 7 Orbi mesh device to benefit from the technological tipping point. It anticipates that consumers will begin upgrading to Wi-Fi 7 later this year.
  • Netgear has set a target of 875,000 paid subscribers by the end of this year and expects the revenue from services to grow strongly. It aims to onboard around 2 million subscribers in the next couple of years.
  • Cybersecurity across home networks has been a rising concern, but there is a lack of consumer awareness of the threat for regular internet users. Netgear is looking to launch awareness campaigns around home network security and push its Netgear Armor service.

Key takeaways

  • Netgear has been working on creating a premium brand experience through its direct channels such as Netgear.com. It has also introduced concierge services for its current and prospective customers.
  • Netgear has invested significantly in highly targeted performance marketing to communicate with premium customers through various channels. Such customers usually opt in more for subscription services compared to non-premium consumers, thereby creating additional recurring revenue for Netgear.
  • Cybersecurity is an opportunity that Netgear can address with its Armor service. It will also aim to raise awareness of both the problem and its solutions.
  • 5G networks are being rolled out at a fast pace in the US and more developed European countries, which is likely to drive increased demand for 5G mobile hotspots as they compete with public Wi-Fi hotspots that are plagued with poor online security.
  • Fixed broadband services have slowed in the past couple of quarters in the US, but fixed wireless access (FWA) has been on the rise. It offers a good alternative to wired services in some situations. We have seen many traditional Wi-Fi networking companies offering 5G FWA devices. Netgear can also tap this market.
  • Due to the COVID-19 upgrade gap, enterprises are expected to upgrade to Wi-Fi 7, skipping Wi-Fi 6/6E. However, because of the macroeconomic difficulties, this upgrade cycle is not expected to become a significant driver until 2024.

Related research

Netgear in Q4 2022: Orbi, SMB Units Offset Consumer, Supply Chain Weakness

  • Netgear’s Q4 2022 revenue was almost flat at $249.1 million.
  • Netgear’s SMB segment ended Q4 2022 with record revenue of $100.1 million.
  • The Consumer and Home Products segment’s revenue declined 14% YoY.
  • Netgear expects the Q1 2023 revenues to be in the range of $185-$200 million.

Netgear’s Q4 2022 revenue was almost flat at $249.1 million, a marginal decline of 0.8% YoY. However, it was at the high end of its guidance range on the back of a strong performance from its SMB segment, which exceeded $100 million for the first time. On the other hand, demand for consumer networking products, especially in the low- and mid-range, declined sharply, leading to a 14% YoY decline for Netgear’s Consumer and Home Products segment revenue. Supply issues were largely resolved in Q4, slightly reducing the reliance on costly air freight. The company continues to experience strong demand for its Orbi premium mesh Wi-Fi, 5G mobile hotspot and Pro AV switches.

SMB delivers record revenue

  • The SMB segment ended Q4 2022 with record revenue of $100.1 million, a 30% YoY growth from Q4 2021. Pro AV switches have grown by more than 60% in 2022 and have been a major contributor to the growth shown by the SMB business line.
  • There is a huge demand for AV over IP switches in the market as more enterprises look to upgrade to a digitally advanced AV network.
  • Netgear has focused on developing managed ethernet switches for the commercial AV industry and has looked to strengthen partnerships with AV OEMs and integrators.
  • A lot of enterprises are now returning to the office. Many offices still have Wi-Fi 5 or older technologies. Consequently, there’s a strong demand to upgrade to the latest Wi-Fi 6/6E technology.

Netgear Revenue by Segment Q1 2019-Q4 2022, Counterpoint Research

Connected Home segment sees weak demand

  • The consumer home segment contracted by more than 20% in 2022 with especially weak demand in the low- and mid-range segments of consumer networking devices. Netgear is a leader in the US retail consumer networking market, so faced the brunt of demand contraction.
  • The segment revenue ended at $149 million, declining by 14% YoY. Netgear and its channel partners are working to reduce channel inventory to align with the lower market size.
  • A bright spot has been the Orbi line-up of premium mesh routers, which continues to perform well in contrast to the general trend of consumer networking. Orbi has become a strong sub-brand and Netgear can be confident about its premium market focus.

Service Provider revenue grew by 86% YoY

  • The demand for 5G mobile hotspots remained high and helped the service provider segment’s revenue recover to $57 million, near pre-pandemic levels.
  • Netgear’s M6 and M6 Pro 5G mobile hotspots are Sub-6 and mmWave enabled routers that have experienced interest and demand from telecom operators across the world.

Netgear Revenue by Region Q1 2019-Q4 2022, Counterpoint Research

Shipments decline by 19% YoY

  • Netgear shipped around 2.2 million units of wired and wireless networking devices. It shipped around 647,000 units of all types of routers and gateways. Wireless remains the dominant segment, driving the revenues with a 57% share.
  • Regionally, Americas’ performance remained similar to Q4 2021. EMEA grew by 5.4% and APAC declined by 10.8% mostly due to currency fluctuations across multiple markets on the dollar’s strength.

Operating margins remain under pressure

  • The supply chain improved in Q4, slightly helping reduce the reliance on air freight. However, as Netgear looked to fulfill orders on time, especially for SMB, it still relied on air transport, straining margins.
  • Netgear is focusing on higher-margin products such as Orbi premium mesh Wi-Fi, 5G mobile hotspots and Pro AV systems, which should help margins in the coming quarters.
  • However, it may need to rely on air transport until all backorders are cleared, so a recovery to profitability remains in doubt.

Netgear Total Subscribers Q1 2019-Q4 2022, Counterpoint Research

Strong growth recorded in paid subscribers

  • Netgear ended 2022 with 747,000 subscribers for its paid services, an increase of 28% from the same period in 2021. It is offering a one-year trial for Netgear Armor in select channels to increase the adoption of its paid services.
  • Services revenue was up by 23.9% annually in Q4 to reach $8.9 million, indicating that Netgear has been experiencing decent demand for its service subscriptions. Overall, it crossed 22.8 million users with 16.2 million app users.

Netgear to experience sluggish demand in H1 2023

  • Netgear expects the Q1 2023 revenues to be in the range of $185-$200 million as it looks to reduce orders for low- and mid-range against the backdrop of excess inventory. It also expects revenues from Service Provider customers to come down to around $25 million in Q1 2023.
  • Netgear is looking to strengthen its position in the premium consumer segment in 2023 with new technology launches, especially Wi-Fi 7.
  • It also expects to add more than a million paid subscribers to its subscription services which have been gaining traction. It has more than 10 million users worldwide who use Netgear’s app to control devices. This is a potential audience Netgear is looking to tap into in the future.
  • The margins are expected to improve slightly in H1 2023. However, the situation is expected to improve considerably in H2 2022 with the supply chain becoming smoother and the consumer segment seeing stronger demand, especially for new technologies.
  • Select channel marketing and consumer-oriented performance marketing campaigns will be pushed to drive the premium consumer segment. 

Key Takeaways

  • Netgear has successfully demonstrated the need for premium networking products in the consumer segment. The number of connected devices in households has increased substantially and consumers are more aware about the networking backbone they are using. This should translate into a good demand for such products.
  • As 5G grows worldwide and in the US, the demand for portable mobile hotspots is expected to remain steady as they become more powerful and provide better battery backup.
  • The majority of consumer networking devices are now being supplied by service providers. Netgear can tap into partnerships with these service providers to scale its low- and mid-range consumer products.
  • With Wi-Fi 7 emerging and competitors launching Wi-Fi 7-enabled products earlier than expected, Netgear must expedite its product introductions in the critical premium segment.
  • Netgear will look to introduce more enterprise-specific products in the future as it sees success for its Pro AV and managed access points line-up. Netgear’s services revenue is expected to jump twofold this year as it taps more users.

Related Research

 

Netgear ends Q3 on promising note, SMB grows 21% YoY

Netgear’s Q3 2022 revenue came in at the high end of its guidance at $249.2 million, with strong growth recorded in the SMB segment. The overall revenue shrank by 14% YoY, due to a decrease in demand for consumer and home products. The constraints on the supply side continue to detract from Netgear’s growth, especially in the premium consumer product segment and SMB device segments. However, it has experienced strong demand for its Orbi Mesh Wi-Fi, 5G hotspot, and latest SMB solutions.

SMB continues to lead growth for Netgear

  • The SMB segment once again exceeded its previous quarter’s revenue for the segment and setting a new all-time quarterly benchmark, growing 21% YoY and ending at $99 million.
  • While most businesses are returning to normal working patterns, the need to upgrade older networking systems is a challenge. Netgear has been one of the first to deploy the latest technology in its enterprise offerings and hence has been experiencing strong demand for its Orbi Pro Mesh Networking solutions and Managed Wi-Fi access points.
  • The Pro AV switches have been performing well in recent quarters, Netgear has emphasized customer support by offering specialized design teams to work with clients to understand requirements.

Netgear Revenue by Segment Q1 2019-Q3 2022, Counterpoint Research

The Connected Home segment continues to struggle, declining 28% YoY

  • Netgear continues to offer a more premium range of products with the launch of the Orbi 850/860 Mesh router and M6 5G hotspot router.
  • The high-end mesh router market has been growing consistently in contrast to the declining overall market and Netgear has been at the forefront in this particular segment with growing demand for Orbi routers.

Service Provider revenue remained stable

  • Revenue from service provider channels was $42 million, similar to Q3 2021. The demand for 5G routers has been increasing as more operators are starting to offer 5G in more regions worldwide. Netgear has introduced M6 and M6 Pro 5G routers with Sub-6 and mmWave capabilities to offer high speeds a small footprint. Netgear has been engaged in signing up more operators across Europe, Oceania, and Asia for its hotspot routers.

Netgear Revenue by Region Q1 2019-Q3 2022, Counterpoint Research

Shipments decline by 29% YoY, and business in all regions declined YoY

  • Netgear shipped around 2.4 million units of wired and wireless networking devices. It shipped around 786,000 units of all types of routers and gateways. Wireless remains the dominant segment, driving the revenues with a 61% share.
  • Regionally, Americas declined by 13.2% YoY, EMEA declined by 21.3% YoY and APAC declined by 7.1% YoY mostly due to weakened demand in the consumer segment and currency fluctuations markets with the strengthening of the dollar against major currencies.

Margins show a sign of improvement but remain below the guidance level

  • The quarter saw better performance from the SMB segment as the supply chain continues to improve allowing fulfilment of pending orders, however it remains below normal levels as further orders pile up.
  • The operating margin improved to a negative -0.9% from -27.5% in Q2 2022 primarily due to improving supply chain and increased demand for the premium routers such as Orbi Mesh Wi-Fi and 5G hotspot routers, all of which have higher margins.
  • To improve the supply, Netgear continues to use air transport to offset delivery delays, but the higher costs hurt margins.

Paid Service Subscribers grow but remain below target

  • Services revenue was up by 14.7% annually in Q3 2022 reaching $8.5 million, Netgear has been experiencing decent demand for its service subscriptions.
  • Netgear is focused on increasing its services revenue by offering a multitude of services for consumers and business users such as Armor, Parental Controls, Meural, Pro Support, and Insight Pro services. Overall, Netgear crossed 22.2 million users with 15.5 million app users.

Netgear to carry momentum into Q4 2022

  • Netgear expects Q4 revenues in the range $235-$250 million as the supply chain will remain constrained in Q4, which would mean Netgear could finish below 2019’s annual revenue. As the brand focuses on reducing retail inventory the guidance level seems apt and it is set to cut orders for lower and mid-range consumer networking devices.
  • It expects the service provider revenue to reach around $50 million amid strong demand for 5G hotspot routers. Due to macroeconomic headwinds, it will continue to operate on lower margins for the next quarter.
  • Netgear has been consistently trying to offer more premium products to the consumer market with the latest Wi-Fi 6E technologies. It has been focusing on Pro AV switches, Orbi Mesh Routers, and Nighthawk 5G hotspot routers.

Key Takeaways:

  • Netgear is looking to pivot its business model with SMB taking the forefront in the coming years, potentially growing to around 50% of its total revenue by next year-end. The focus on premium-end routers is paying dividends in terms of good demand and will likely continue to do so in future.
  • The brand is expected to introduce products with the latest technologies such as Wi-Fi 7 and more products with 5G capabilities. For improving margins, it is focused on higher ASP products and is also offering a unique premium experience to consumers.
  • The average price for networking devices in the consumer market is going up, as more consumers are opting for higher-speed data services and are adding more connected devices in the home. The growing consumer awareness around internet security and threats will lead them to acquire better devices with additional software security.
  • Netgear will benefit from the enterprise segment as more companies will look to upgrade their existing legacy systems to Wi-Fi 6/6E/7. It also tends to push its Netgear subscription services to add more value to its products.

Related Research:

Supply Constraints Halt Netgear Growth Streak in 2021

Netgear, one of the leading manufacturers of gateways, routers, and enterprise networking solutions, has reported a sharp 31.6% YoY fall in its Q4 2021 revenues to $251.2 million. For 2021, the revenue fell 6.9% YoY to $1.17 billion. This goes contrary to the tremendous growth shown by the router and gateways industry in 2021, driven by the increase in capex for fiber deployment and significant demand for 4G/5G fixed wireless services.

­Supply constraints hit revenues

  • Despite having a higher demand for premium SMB products, Netgear was not able to fulfil the orders due to factory closures following the outbreak of COVID-19’s Omicron variant.
  • The operating margins declined due to higher freight costs, as air passages were used more often to offset the delay due to the variant, and higher component costs owing to supply chain shortages.

Netgear Revenue By Segment Q1 2019 - Q4 2021

SMB segment bright spot in 2021 amid supply constraints

  • SMB segment grew 15% compared to pre-pandemic levels. There was a large demand for the brand’s premium wireless solutions.
  • Netgear is offering a new suite of cloud-based video analytics solution ProAV, which has seen great demand.
  • The overall paid subscriber base for services such as Netgear Armor and Meural grew a healthy 33% annually to reach 584,000.
  • The strategic shift in focus to premium offerings helped drive the premium consumer segment revenues by 10% YoY in 2021 but couldn’t offset the overall decline due to supply constraints.
  • APAC region grew over 4.4% YoY, while Americas and Europe saw a decline of 38.6% and 25.8% respectively. However each region saw good demand for SMB products, but it was not able to offset the loss incurred by the consumer segment.
  • Shipments in Q4 2021 were about 2.7 million units with a third of them coming from gateways/routers.
  • Wireless products remained the key revenue driver for Netgear, contributing to 58% of the total revenues in 2021. Wireless products remain the key focus segment for the company going into 2022.
  • The brand saw strong demand for ORBI Mesh systems and Nighthawk gaming and non-gaming Wi-Fi 6 routers.
  • Netgear experienced a decline in retail and service provider channels due to supply shortages.

Netgear Revenue By Region, Q1 2019 - Q4 2021

Outlook for 2022

  • Netgear expects the supply chain to remain constrained in Q1 2022 due to component shortages and factory closures. It expects normalcy in the supply chain from Q2 2022 provided there is no fresh COVID-19 outbreak.
  • Netgear will continue to take a hit on operating margins by using air transportation as a method to fulfil its pending orders. However, the brand will increase prices going forward to minimize the effect of transportation costs and increased component costs.
  • Netgear has announced a plethora of products this CES and expects its premium line-up of Nighthawk and Orbi Mesh routers to perform well in 2022. It will continue to focus more on higher-margin premium products that offer long-term stability for the company and have seen great demand in recent times. The company is betting big on Wi-Fi 6E routers and plans to ship them in big numbers this year.
  • Netgear expects to reach 750,000 more paid subscribers by the end of 2022 for its variety of online services. Since most businesses are opening offline in 2022, Netgear aims to offer cutting-edge solutions to those looking to upgrade their existing Wi-Fi 5 or below systems.
  • The brand has taken initiative to improve customer experience by overhauling its online purchase process.

Recommendations

  • The focus on increasing revenue through premium offerings should continue for better brand positioning. However, the brand should also focus on low- and mid-range products for developing markets, which have been generating significant revenue in the past.
  • Fixed wireless access (FWA) has been gaining momentum in North America for the past year and this year it is expected to grow further, entering more rural territories to bridge the digital divide. Netgear’s recent partnership with T-Mobile to offer 5G FWA products is a good step in promoting FWA. The brand should have more such partnerships to further increase its revenues through the service provider channel.

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CES 2022: TP-Link, Netgear, Asus Drive Wi-Fi 6E Momentum

Despite several larger OEMs and Internet Service Providers pulling back from physically attending, the Consumer Electronics Show (CES) saw some interesting device launches for wireless routers by key industry leaders such as Netgear, Tp-Link, Asus and Linksys. Wi-Fi 6E is the pick of the technologies among the various OEMs worldwide and devices were launched with some new features such as rotating antennas, quad band support and blazing-fast downlink speeds.

Here are top product launches and announcements by OEMs at this year’s CES:

World’s First Rotating Antenna Router Archer AXE200 Omni by Tp-Link

TP-Link Announcement at CES 2022 Counterpoint Research

TP-Link is the first OEM to launch a Wi-Fi router with self-adjusting antennas. This Wi-Fi 6E router automatically changes the orientation of its antennas to optimize bandwidth. It also won a CES 2022 Innovation Award. The device offers a maximum speed of up to 11 Gbps that works on 6 GHz band providing superfast and reliable internet connectivity for power users. The device is aimed at users who struggle with poor network reception from standard Wi-Fi routers.

TP-Link Announcement at CES 2022 Counterpoint Research

The Archer AXE300 provides quad band support, offers speed up to 16 Gbps and can connect up to 350 devices. The router will be offered later this year and also has 10 gigabit/s ports to support fast wired internet connectivity. The quad band offers lowered network congestion with an additional 5 GHz band and a wide 6 GHz band for Wi-Fi 6E devices which offers to reduce interference and broaden coverage. The device is an ideal solution for small and medium enterprises, gamers and freelance power user who work on cloud systems, which can deliver unmatched speed and connectivity required by them.

TP-Link Announcement at CES 2022 Counterpoint Research

TP-Link has has options for larger premises with the Deco XE200, which offers 11000 Mbps of maximum speed and covers 6500 square feet of real estate with just two devices and the area coverage can be increased by opting for the three device solution. TP-Link’s proprietary AI Mesh solution promises better connection response rates by automating bandwidth switching within the mesh system.

Comparison between top devices announced by TP-Link

TP-Link provides all its routers with HomeShield powered by Avira, which acts as a security solution to protect the network and vulnerable IoT devices connected on the network from hackers. Security has been a concern among the OEMs due to several vulnerabilities found in such devices last year. The brand has integrated EasyMesh intelligent software in its routers and range extenders to enable the easy building of mesh networks using any EasyMesh-supported device.

TP-Link has announced a new brand, Aginet, which will cater to Internet Service Providers’ growing demand for better connecting devices to improve their Quality of Service (QoS) to consumers. TP-Link will launch a separate product line under this brand with a philosophy of agile and pragmatic solutions for the market. There has been a significant increase in the fiber connections worldwide in the past two years and with growing demand for xPON routers and mesh network solutions this is a practical move by the brand to help them align their products better in the market.

Netgear builds on Wi-Fi 6E Leadership

The pandemic induced high demand for better internet connections and increased dependence on Wi-Fi for working, learning and entertainment from home. Modern WI-Fi routers require more bandwidth, more number of bands, and better antennas to work in congested environments with various IoT devices and network devices vying for connectivity.

Netgear has introduced several superfast Wi-Fi devices adopting the latest Wi-Fi 6E technology in the last quarter of 2021. Building on this, Netgear announced the Nighthawk RAXE300 Triband Wi-Fi router which offers throughput speeds of up to 7.8 Gbps, eight Wi-Fi streams and can cover up to 2500 sq. ft. With pre-optimised antennas, one 2.5-Gbps port and five 1-Gbps ports to offer superfast wired connectivity as well. At $399, Netgear has priced it competitively, it remains to be seen how the competition responds. Netgear had several devices mentioned by the CES 2022 Innovations Honors’ Board including the already launched Orbi 5G Wi-Fi 6 Mesh System.

With working from home, a feature of life under the pandemic, employers, especially smaller businesses, are looking for affordable and reliable solutions for their employees that offer an experience on par with office life. Netgear’s Orbi line-up offers such reliability and security to be deployed for work from home scenarios, these devices are affordable and offer mesh networking solutions for better connectivity.

Netgear announced a Game Booster Solution for gamers using Netgear gaming routers, to enhance their user experience by offering software to find better server connections, geo filters for locations and a ping heat map to reduce lag. This is a subscription-based service aimed at gamers, which is a large market, especially as the pandemic encouraged new gamers and even people taking up gaming professionally.

ASUS drops a Quadband gaming router, the ROG Rapture GT-AXE16000

ASUS announced a quadband gaming router, ROG Rapture GT-AXE16000, which offers speeds of up to 16000 Mbps, 6 GHz band support and six 1-gigabit/s ports to offer a strong gaming experience. The device is powered by a quad-core processor from Broadcom, which improves network throughput by 18%, compared to the previous generation device for accelerated data transfers. ASUS’s own RF technology improves signal coverage by 38% compared to its previous product, and the device offers intelligent AI Mesh capabilities to connect with another Wi-Fi 6E EasyMesh enabled router.

At USD649, ASUS is assuming gamers are willing to pay a premium for the speed the product offers. However, it’s currently the cheapest quadband option available. The brand has also updated its ROG GT-AX11000 Pro with a beefier chipset to offer improved Wi-Fi 6 performance.

Linksys offers an affordable Wi-Fi 6 device: Hydra Pro 6

Linksys Announcement at CES 2022 Counterpoint Research

Linksys has unveiled its latest dual-band Wi-Fi 6 router, Hydra Pro 6. The router is launched into a competitive space with some recently launched products from Netgear, TP-Link and D-Link, however Linksys is carving its own niche by offering similar specs but at lower prices that its competitors. The Hydra Pro 6 is powered by Qualcomm’s Immersive Home 216 Platform along with the access to the 160 MHz channel, which offers true Wi-Fi 6 experience with faster speeds up to 5.4 Gbps and better connectivity with up to 30+ connected devices. The device is perfect for regular home use cases and can be a good offering for Internet service providers as well.

Linksys has also announced a cloud managed access point for large spaces such as restaurants, retail stores and small businesses, which require high concurrent device connections with dense network congestion. It offers a cloud-based management system that helps the system administrator to control, configure and monitor remotely. The solution is powered by Qualcomm’s Networking Pro Platform 1200 that claims fast throughput and good reliability. It has 4 x 4 internal antennas for improved signal coverage.

Key Takeaways

The Wi-Fi market is poised to grow significantly in 2022 as we expect strong subscriber growth in most regions of the globe. Regulators are working to ensure that the 6 GHz band available for unlicensed use with the spectrum already available in North America and Europe. As a consequence, we will see a rapid adoption of Wi-Fi 6/6E devices this year.

The major focus for OEMS this year will be to increase signal coverage and strength and offer faster Wi-Fi 6/6E devices at a range of price points. OEMs and ISPs will work together to improve the Quality of Service (QoS) and as the fiber deployment increases across the globe more demand will arise from xPON devices. Mesh Network systems will be in demand too, as a lot of ISPs are bundling it with their services and the mesh systems are a better choice for users with larger premises and more connected devices.

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