The network devices market is expected to grow from USD 26.4 billion in 2022 and is projected to reach USD 36.4 billion by 2027; it is expected to grow at a CAGR of 6.6% during the forecast period, according to Research and Markets.
The market for WiFI access points to have the highest CAGR during the forecast period.
The network devices market for WiFi access points is expected to grow at the highest CAGR during the forecast period. The growing inclination towards smartphones, laptops, and tablets is creating a surge in demand for Internet service providers and access point (AP) providers.
This is expected to result in a conducive environment for the access points market. Increasing demand for access points to improve the digital infrastructure across commercial and enterprise sectors in India, China, and Japan is expected to boost the AP market. Favorable government initiatives to promote the digitalization and industrialization of developing economies will also positively influence the market. AP devices have become necessary for many businesses, institutions, and home users. The use of APs can help eliminate the problems of poor WiFi coverage, slow connectivity, dead zones, and weak signals.
The outdoor network devices segment to have higher growth throughout the forecast period.
The vast majority of routers deployed are not rugged and weatherproof and are deployed in indoor settings such as homes, retail stores, manufacturing facilities, and offices. In fact, almost all network devices (especially gateways) are deployed indoors. WiFi is not suitable for long-range outdoor use, and outdoor routers use cellular connectivity.
Outdoor 4G/LTE routers are ideal for delivering optimal network connectivity to outdoor environments such as oil and mining sites, and to serve as reliable communication backbones for critical communication applications.4G LTE routers can also provide an excellent 4G LTE connection enabling instant POS setup for credit card access in remote areas where there is no fixed-line Internet connection. Since cellular and outdoor routers and APs are comparatively more expensive than indoor WiFi routers, the indoor routers segment held the larger share of the market.
The market for industrial applications to grow at the highest CAGR during the forecast period.
The market for industrial networking is expected to record the highest CAGR during the forecast period. Industrial applications mainly include utilities (energy and water) and automated manufacturing. Industrial networks deal with the transfer of data on a large scale.
Since the inception of Industry 4.0, the penetration of AI and IIoT technologies in the manufacturing sector has been increasing rapidly. AI-and IIoT-Integrated systems allow optimization of manufacturing processes, send early alerts, contribute to quality control, and forecast equipment failure in machinery. By gathering precise data, manufacturers can develop innovative AI applications to differentiate themselves from their competitors.
Market in APAC to grow at the highest CAGR during the forecast period.
The network devices market in APAC is expected to see the fastest growth during the forecast period. The APAC region is a leading industrial hub and an emerging and important market for several other sectors as well. The growing penetration of the Internet across the commercial and industrial spaces, as well as the increasing reach of wireless connectivity and improving IT infrastructure, are among the key determinants of growth for the network devices market in APAC.
In February 2021, China’s Ministry of Industry announced plans for a hi-tech transformation of manufacturing to offset rising production costs and consolidate its position in the global supply chain. Beijing will help modernize the sector with advancements in 5G, cloud computing and IoT. China aims to build 30 fully connected 5G factories in 10 key industries by 2023; the country has fast-tracked industrial Internet development through integration with 5G technologies. These initiatives are expected to fuel the growth of industrial Internet in the APAC region.