17 March 2008
Further margin cuts on routers seem inevitable after Context SalesWatch Distribution data for the UK market in January showed a decline in average selling prices on 802.11n-based equipment.
The average selling price through distribution dropped to €111 (£85), down from €119 in December, with kit from Linksys, Belkin and US Robotics among the worst affected.
However, prices on other vendors, including Netgear and D-Link, remained stable, while Apple’s AirPort Extreme Base Station increased.
Roger Hockaday, marketing director EMEA at Aruba, suggested that 802.11n’s higher consumer penetration rate — compared with the enterprise — was likely to affect price cutting.
"All these vendors make it very competitive in the consumer wireless market, so perhaps it’s not surprising we’re starting to see price pressure," he said, adding: "I don’t know of any pressure in the enterprise sector yet."
Sarah Guy, marketing manager at networking kit vendor ZyXEL, was also unsurprised that prices were declining: "The product set is becoming more mainstream, so you will see a lot of large multiples running aggressive sales promotions."
ZyXEL has chosen to avoid the 802.11n sector until the standard is ratified. Following the most recent meeting of Task Group N, the IEEE body currently developing the upgraded standards, the delayed project is unlikely to be ready before the middle of next year, although Hockaday pointed out that this should not affect take-up.
