Releases - 05/21/2017

Routers All connected



Demand for Internet in Brazil is growing and, therefore, sales of routers remain heated. Connection quality and low penetration of broadband in the country also create opportunities for the market.

Unsurprisingly Brazilians spend much of their time online. Recent research on the subject organized by the Worldwide Independent Network of Market Research and performed here by Ibope Intelligence, revealed that 95% of respondents surf daily, frequency higher than that of Americans (77%). The same survey showed that 49% of survey respondents also consume movies and TV shows on demand weekly, which places Brazil at the top of this ranking alongside the United States. As the internet redefines habits and shape new behaviors, increasing demand for connectivity directly impacts on the routers market performance.

With the consolidation of the Internet of Things, the search for these devices – including to ensure satisfactory connection of multiple devices on the same network – encourages the industry and promotes retail sales. Last year alone, more than 5 million devices were connected, according to Gartner. For the next four years, the projections indicate that number could reach 80 billion. “The router market is promising because the demand for networking grows every day. The IoT will also greatly boost sales, since more equipment and products will communicate with each other and with the network, “explains Gustavo Klitzke, Manager of Intelbras Wireless Segment.

A few years ago, the internet was accessed mainly through computers. Now, the scenario is different. “Even children have smartphones. Friends and relatives when they come to visit us, before you even say hi, they ask what is the Wi-Fi’s passcode. According to Frost & Sullivan, by 2020 each person will have, on average, five web-connected devices and the households up to ten “says Ivanildo Miranda, Program Manager & Planning of D-Link. For the executive, the unfavorable economic scenario consumption did not affect the local market for routers. “It is growing at a rate of 30% in 2016. The prospects are that this performance will continue next year.”

Opportunities and obstacles
Low speed mobile internet and the price per gigabyte transmitted over 3G and 4G networks also makes the country stand out among the most use Wi-Fi connections in the world – another aspect that facilitates the marketing of routers. According to the study of Global State of Mobile Networks, published by Open Signal Consulting, Brazilian smartphone users spend 58.55% of their time in this way connected to the internet, participation that puts the country in 12th place of the 95 nations surveyed. In addition, Brazil has a significant percentage of households that remain offline. In the first five months of the year, only 40% of Brazilian households had access to broadband, according to the National Telecommunications Agency (Anatel).

“The digital inclusion programs such as incentives for the manufacture of devices with Wi-Fi connection, inserting several users to the world of internet. It is true that a few households have access to broadband, however, these consumers use mobile Internet from work and public places, and those with more users, need to expand the distribution and transmission of data, “notes Eliane Silva, Product Manager of Maxprint. This reality shows two other features of the local market: There is a growing demand for basic products that provide connectivity, but also for models that provide greater range, speed and signal quality. “The amount of data sent and received is increasing and generates the need for devices that can distribute it,” adds the executive.

The price is still a bottleneck that limits the expansion of the market home routers. “Given access and the value of products with new and cutting-edge technologies, the entry models continue with greater appeal to consumers,” says Adilson Luiz, responsible for the development area of Knup products. The cost of the connection in Brazil is also another obstacle. “The router is not the most investment to have internet, it is a single expense. The biggest impediment to widespread access in homes is the price charged by operators, which also include high taxes, and low speed offered in some regions, “adds Rafael Cortes, Product Manager of Multilaser, which still bet on annual market growth in the double digits. “People stop buying clothes, but do not cease to pay the Internet,” said Cortes.

Incentive for sale
While there is demand for input products, especially in remote areas of the capital, the commercial director of TP-Link, Marcello Liviero, believes the exponential sales of high-end versions, driven by the need of the users. “In addition to incentive programs for digital inclusion, social networks, the increasing number of smartphones and connected apps, simultaneously, the evolution of other technologies that require high-speed communication such as TV 4K, virtual reality devices, streaming in HD and gaming market also drive market growth.”
With the need for consumers to update the installed base of routers, the consumer electronics stores should benefit and prepare for the increase in sales. “From the channel perspective, it is interesting to diversify the lines and improve the sales mix by combining, for example, routers with smart TV, mainly in regional stores, where there is no large specialized electronics stores for that item, “said Miranda, from D-Link.

The Maxprint Product Manager also agree that consumer electronics retail offers advantages for marketing routers. “There is a high flow of people, ease of financing and synergy with products that have their optimum performance, is the case of tablets, smartphones, TV and notebooks, among others.” Klitzke from Intelbras reinforces the argument. “The participation of this channel is growing and we consider promising, as consumers seek for a one stop shop where they can find all solutions for your home,” he adds.

Trends
Faced with requirements imposed by the market, the industry invests in solutions that guarantee quality for the connection. “The important thing is that you have a router that delivers the contracted internet and give scope to the area in which he wants to use the Wi-Fi signal,” says Cortes from Multilaser. The Executive bet on models with standard AC, offering greater speed, coverage and distance, reducing blind spots.

“The home routers already work with high transfer rates. Now, innovation is through devices that support new networking technologies as the standard 802.11ac, the fifth generation of wireless technology for data transfer over wireless networks, and can reach a speed of up to 6.9 Gbps, nearly eight times more than the current standard. Today, it represents about 10% of the market, mostly in the enterprise application, “adds Luiz from Knup.

The internet distribution by mains (power line) and support for multiple users are two other trends says Miranda from D-Link. “Changes in the usage profile of the internet and devices that guarantee access to it have guided new solutions, as the technology of multiple users with various input / output (MU-MIMO), the use of the electric grid for data transmission and other advances that accompany this change in the access profile, i.e., a single person to multiple users and devices.”
Among with so many new specifications, retail and industry have to train the sales team and prepare promotional material, the challenge of directing the right product for each intended application by the consumer. The trend is that these characteristics are even more diversified. “The router will be the connectivity hub, integrating technologies to connect to the internet and other devices that are part of the Internet of Things. In addition, will be a central point of network service enabling to manage files and act on parental control, for example, “says Klitzke from Intelbras.

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