India’s networking market which includes Ethernet Switch, Routers, and WLAN segments witnessed a 26.7% year-over-year (YoY) decline in 1Q20. India started to witness the initial effects of COVID-19 during 1Q20. The decline was majorly due to a slowdown in business activity post mid of March.
Reduction in investment of on-campus infrastructure was the main driver for the slowdown during 1Q20. Routing saw the maximum YoY decline of 48.4% due to the effects of COVID-19, telecom AGR dues, and huge one-time investments that happened during 1Q19. Other categories like switching and WLAN had YoY decline of 10.8% and 16.8% respectively.
India Ethernet Switch Market 1Q20
According to IDC’s Worldwide Quarterly Ethernet Switch Tracker, the 1Q20 Ethernet Switch market in India stood at USD 130.3 million (by vendor revenue) registering a YoY decline of 10.8%. The decline was attributed due to the slow demand conditions caused by COVID-19 in India. Investments across multiple industries softened due to the lockdown, which led to remote working conditions thereby impacting the investments on-campus infrastructure. Vendors with dependency on China for raw materials and finished goods also got impacted due to the lockdown. Top investments for switches came from services, telecommunications, finance, and government.
Cisco continued to dominate the Ethernet Switch market with a 57.4% share during 1Q20, followed by Hewlett Packard Enterprise (HPE) and Dell Technologies.
India Router Market 1Q20
According to IDC’s Worldwide Quarterly Router Tracker, the India Router market in 1Q20 stood at USD 69.2 million (by vendor revenue) with a steep YoY decline of 48.4%. The slowdown in the router segment during 1Q20 was due to strong investments that happened in 1Q19 coupled with the effects of the pandemic and the AGR penalties. From a quarter-over-quarter (QoQ) perspective, telecommunications buying remained stagnant. However, the enterprise routing segment had a significant QoQ decline of 26.7%.
Cisco leads the router market with a 66.4% market share in 1Q20 followed by Nokia and Huawei.
India WLAN Market 1Q20
According to IDC’s Worldwide Quarterly Wireless LAN Tracker, the Indian WLAN market had a YoY decline of 16.8% during 1Q20. The market stood at USD 49.7 million (by Vendor Revenue). Consumer class routers were the most impacted segment as most of the manufacturing were stalled in China during 1Q20 thereby causing supply issues. However, demand for consumer class routers is expected to stabilize with increasing remote working needs. Enterprise-class AP’s also declined due to lower demand for campus infrastructure needs. Overall consumer and enterprise-class WLAN declined by 20.5% and 13.6% respectively.
With a market share of 20.9%, Cisco gained the market leader position in the WLAN segment during 1Q20, followed by TP-Link and Hewlett Packard Enterprise (HPE).
Sudharsan Raghunathan, Senior Market Analyst, Enterprise Networking, IDC India says, “While the pandemic will have an immediate negative impact in terms of infrastructure buying, COVID-19 will act as a catalyst in enabling the next wave of digital transformation among enterprises. Enterprise networking will slowly move away from point solutions to combining multiple aspects of networking and security under fabric to support the shifting work patterns. Location-based analytics will also play a key role post lockdown, enabling enterprises to trace contacts and social distancing. The COVID-19 situation will enable enterprises to revisit their strategies around cloud, collaboration, and security.”
IDC India Forecast
The Ethernet Switch, Router, and WLAN market are expected to grow in single digits in terms of compound annual growth rate (CAGR) for 2018–2023. Increased adoption of emerging technologies such as cloud, IoT, mobility, etc. would drive incremental revenues. IDC also expects large investments for 5G rollouts in the next couple of years.
