What Company Has the Largest Router Market Share? Market Size, Split, and Trends
Updated: October 03,2022
As technology advances, the number of devices that need internet access continues to grow. Nowadays, a wireless router presents a simple way to connect multiple devices in a single local area network. It has become a convenience for households and a necessity for businesses.
In order to ensure that you’re getting the most out of your router, it’s important to be aware of the current state of the industry. By understanding what companies have the largest router market share, you can make an informed decision about which one can offer the best product for your home office or gaming station.
According to recent reports, the top three companies in the router and network industry today are Cisco, Huawei, and Arista Networks. Let's take a closer look at how they perform, their competition, and what the future holds for this industry.
Global Market of Routers
Consistent router market growth has been seen around the world in recent years. The latest data for 2021 shows that the year-over-year increase in Q4 2021 was 7% for both enterprise and service provider solutions globally.
Service providers were responsible for 77.4% of the global revenue, which drove the global router market forward and increased the year-over-year performance by 10.1%. This included both communication and cloud service providers.
The enterprise segment had seen a decline of 2.6% in Q4 2021 but still ended the year on a positive figure. Router revenues increased by 7.9% for service providers and 2% for the enterprise segment.
Projected Growth and Market Analysis
The estimate is that the growing demand by ISPs and the need for high-speed internet connectivity have created great opportunities in the wired and wireless router market.
That’s why the router market size is estimated at $15.1 billion in 2022. Moreover, with an estimated CAGR of 8.6% for the forecast period between 2022 and 2027, the market is expected to reach $22.9 billion.
Additionally, the Internet of Things has changed the way users view smart devices and will significantly drive the growth of the global wireless router market.
For a consumer router, integrated Wi-Fi is a necessity, and major companies are aware of it. The switch from 4G to a 5G network and the development of Wi-Fi 6, with speeds increasing from 3.5 Gbps to 9.6 Gbps, are going to change the industry even further.
Brands such as Asus, TP-Link, D-Link, and others can already be found integrating the technology in their top-of-the-line wireless routers.
A stable internet connection is now vital in every home, especially with the growing demand for smart home technology. Home security systems have also become quite accessible and easy to integrate, in addition to other household-connected devices that require higher bandwidth.
COVID-19 Impact on Market Dynamics
It’s obvious that the pandemic was highly disruptive to multiple industries, and routers weren’t excluded.
The Wi-Fi router market size has increased because of the need for better internet connectivity for work, education, and entertainment. The wired router market is also expected to grow because of the need for improved security by many professionals working from home.
Reports from ISPs show that the pandemic created a surge in data consumption, with increased traffic by almost 60%. Additionally, internet traffic reportedly increased by 40% during peak business hours. As more people shift to the work-from-home model, the traffic is unlikely to return to the same levels as before the pandemic.
Market Growth by Region
Regionally, the growth rate of the industry has reflected the increasing demand in regions with an expanding internet infrastructure.
The market in the Asia-Pacific region (excluding China and Japan) has increased by 19.4%. The Chinese market hasn’t experienced such an improvement, as it had a stable 5.5% year-over-year growth in 2021.
With a well-established internet connection infrastructure, Japan didn’t have as many market drivers, and its market declined by 11.1%.
Europe’s routers’ market share hadn’t increased significantly. The western part of the continent saw an increased demand that resulted in a 3.1% annual growth. In the central and eastern parts of Europe, both service provider and enterprise router markets saw an annual decline of 16%.
In the Middle East and Africa, the wired and wireless router market size had also dropped by 11.8% compared to the previous year.
In North America, the US has reflected the changing key market trends, with the service provider revenue growing by 37.8% and the enterprise section of the revenue declining by 18.5%. Meanwhile, the Canadian router market share increased by 6.1%.
Finally, the Latin American region followed the growing trend for the year, and its router market size grew by 4.8%.
Key Market Players
Here’s how successful key players among the prominent router companies fared in the past year.
Cisco is now a well-known international technology conglomerate, founded in 1984 by Sandy Lerner and Leonard Bosack.
The company has a firmly established presence in computer network infrastructure, and its success in 2021 is evidenced by its rising Ethernet switch revenue and combined service provider and enterprise router revenue.
In fact, Cisco's network market share for routers was 34.6%, which makes Cisco the leading router provider in the world. This comes as no surprise as Cisco is constantly working on improving its network technology with new solutions.
Huawei Technologies is a global giant in the development of computer networks and telecommunications equipment. So far, the company has its infrastructure in more than 170 countries.
In 2021 the company's combined service provider and enterprise router revenue declined 1.2% for the year, leaving Huawei with a router market share of 30.5%.
Arista Networks is a data-driven networking company that focuses on large data centers, campus, and routing environments. The company has seen significant success in recent years, with Ethernet switch revenue increasing by 28.2% in 4Q21 and 27.7% for the full year.
This gave Arista a 7.6% market share in 2021, making it one of the leading networking providers in the world. With its focus on innovation and customer satisfaction, Arista is poised for continued success in the years to come.
What the Future Holds for Router Vendors and Manufacturers
The rising numbers of smartphone, laptop, and tablet users, easier wireless access to high-speed internet connectivity, and public internet relying on Wi-Fi technology have all changed how we consume online content.
That’s why we’ve seen a rise in streaming services, an increase in multimedia content, and a change in how we communicate online. None of that would be possible without high-speed routers and the demand for such content, which further drives the bandwidth limits of servers and data centers.
All these factors contribute to the development of other industries, and that’s why we’ve seen rising demand in the streaming market. Major market players such as Google, Amazon, and Netflix have recognized it and shifted their businesses towards such services or acquired companies that will help them exploit its potential.
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With a degree in humanities and a knack for the history of tech, Jovan was always interested in how technology shapes both us as human beings and our social landscapes. When he isn't binging on news and trying to predict the latest tech fads, you may find him trapped within the covers of a generic 80s cyberpunk thriller.