Vendors That Underestimate Dual-Band Wi-Fi 7 Demand Will Be Excluded from Major Market Opportunity

The Wi-Fi Alliance kicked off 2024 with the official introduction of Wi-Fi 7, marking the latest 802.11 standard’s transition from a work-in-progress draft to a fully-fledged member of the Wi-Fi family. There are now a host of flagship tri-band Wi-Fi 7 solutions on the market (which support the new 6 Gigahertz (GHz) spectrum alongside the legacy 2.4 GHz and 5 GHz bands), with recent additions from NETGEAR, Ubiquiti, ZTE, and Zyxel Communications. Large-scale tri-band Wi-Fi 7 enterprise deployments have begun in the United States, notably in the Las Vegas mass transit system and at the Camping World Stadium in Orlando (both of which use CommScope’s Wi-Fi 7 solutions), and select Internet Service Providers (ISPs) have begun deploying tri-band Wi-Fi 7 equipment in their subscribers’ homes, including Singtel in Singapore and Free in France. Further driving the momentum behind tri-band Wi-Fi 7 was the Federal Communications Commission’s (FCC) approval in late February of seven Automated Frequency Coordination (AFC) systems, which are required for the range and performance-boosting Standard Power 6 GHz. These developments all point to a positive future for tri-band Wi-Fi 7, but they are only half the story. While largely overlooked, the market is also experiencing growing demand for dual-band Wi-Fi 7; that is, equipment that supports just the legacy 2.4 GHz and 5 GHz bands. Dual-band Wi-Fi 7 solutions are not only in demand in markets without unlicensed 6 GHz access, such as Mainland China, but they are also attractive to cash-strapped ISPs and enterprises feeling that the considerable price premium of 6 GHz-enabled Wi-Fi 7 is still hard to justify given the immature 6 GHz device ecosystem and reality that the average consumer or enterprise does not yet have the need for Wi-Fi 7’s advanced capabilities. This ABI Insight analyzes the value proposition of dual-band Wi-Fi 7, investigates some of the sectors in which it can be expected to experience the most success, and answers how the industry can continue to innovate and differentiate their products without harnessing the 6 GHz band.

As is typically the case when new Wi-Fi protocols are introduced into the market, the first wave of Wi-Fi 7 infrastructure (unveiled when the standard was still in its draft stage) was skewed toward the high end, with advanced specifications designed to extract the maximum performance gains from the new standard. This meant pushing all the optional Wi-Fi 7 features to the max, including enabling 320 Megahertz (MHz) channel widths and, of course, supporting the new 6 GHz spectrum. Such leading-edge features don’t come without cost though, with the additional 6 GHz radio alone inflating the total Bill of Materials (BOM) by 20% to 30%. This extra cost was a major burden when many key markets have either none or restricted unlicensed access to the 6 GHz spectrum. Therefore, following the initial wave of high-profile flagship launches, subsequent Wi-Fi 7 infrastructure releases have seen their non-mandatory Wi-Fi 7 features pared back to reduce their cost and expand their reach. Most notably, many Wi-Fi 7 solutions have emerged that have cut the 6 GHz radio, and instead opted to support the legacy 2.4 GHz and 5 GHz bands only. Such solutions are naturally very appealing in markets without unlicensed 6 GHz access, but surprisingly to some, they are also gaining traction in markets that enjoy the availability of unlicensed 6 GHz. This is due to customers who wish to leverage Wi-Fi 7 features such as Multi-Link Operation (MLO) and Multiple Resource Unit (MRU) to improve the performance and spectrum efficiency of the legacy spectrum bands, but have chosen to forego 6 GHz compatibility due to a combination of budget limitations, a low level of 6 GHz client penetration, and, in some cases, a lack of need.

One of the market segments currently best suited for dual-band Wi-Fi 7 is Multi-Dwelling Units (MDUs). These high-density apartment complexes have traditionally suffered from high levels of interference and congestion, severely impacting Quality of Experience (QoE). At the same time, 6 GHz client device penetration among general consumers is currently low, meaning 6 GHz radios would do little to alleviate the issue, even if they were available. Thus, in MDUs, the spectrum efficiency capabilities of dual-band Wi-Fi 7 can be leveraged to enhance performance on the legacy bands, delivering improved QoE. This example focused on one specific environment, but in reality the over 40 Gigabits per Second (Gbps) maximum throughputs of tri-band Wi-Fi 7 are not relevant to the majority of consumers, regardless of where they live. Rather, the improved reliability has a greater bearing on their QoE, and for some with low throughput requirements, dual-band Wi-Fi 7 alone will be sufficient to satisfy their needs.

Another core market opportunity for dual-band Wi-Fi 7 is in Operational Technology (OT), for three core reasons. First, they are increasingly prioritizing the compactness of the 802.11 hardware they deploy, as this enables the versatility required for mounting onto the increasing number of robotics found in these environments. An additional space-consuming 6 GHz radio is, therefore, not desired. Second, the extended life span of OT equipment (spanning 25 years, in some cases) means that 6 GHz Stations (STAs) will be a rarity for many years to come—again negating the need for 6 GHz Access Points (APs). Finally, the external antennas that OT requires for fine-tuned transmissions are not permitted for 6 GHz equipment without AFC systems, but the path for AFC authorization in many countries outside the United States is unclear. Combined, these trends will push against 6 GHz introduction into OT, although the demand for Wi-Fi 7’s enhanced determinism will still make the standard attractive. Given this, ABI Research anticipates that dual-band Wi-Fi 7 solutions will be the most successful in the industrial verticals with relatively limited levels of spectrum congestion (so, they are not desperate for the 6 GHz band), but that need improved determinism for their high density of moving devices. The two most prominent examples here are mining and oil & gas.

The immature 6 GHz client ecosystem will deter many ISPs from considering tri-band Wi-Fi 7 in the near term, and while dual-band Wi-Fi 7 does offer tangible benefits over dual-band Wi-Fi 6, these enhancements alone will prove insufficient to justify an upgrade, especially at a time when ISPs are under pressure to limit their Capital Expenditure (CAPEX). Only when 6 GHz client device penetration reaches high levels and consumers begin craving the 6 GHz spectrum will ISPs begin migrating their subscriber base en masse to this latest standard. Therefore, ABI Research forecasts that it won’t be until 2028 when annual Wi-Fi 7 CPE shipments surpass those of the Wi-Fi 6. While ISPs will continue to favor dual-band Wi-Fi 6 in the immediate future, this does not mean that they are abandoning innovation all together, only that they are prioritizing resources elsewhere. Instead, they are looking to new areas of differentiation, the most prominent of which include the following:

• Sustainability: A major concern for European consumers, in particular, this spans everything from the use of recycled plastics in the Customer Premises Equipment (CPE) to the application of Artificial Intelligence (AI) to reduce operational energy consumption. Wi-Fi equipment vendors placing sustainability at the heart of their value proposition include Vantiva, Zyxel, and AVM, which all have a large portion of their business concentrated on the European continent.
• Fixed Wireless Access (FWA): An alternative modem access technology that leverages 4G Long Term Evolution (LTE) or 5G, as opposed to the traditional fixed access options of Digital Subscriber Line (DSL), cable, or fiber. FWA CPE is also particularly attractive to Mobile Network Operators (MNOs) not only because it provides them a method to monetize their 5G networks, but also because it enables them to capture business from their fixed-line operator competitors. To address this rapidly expanding product type, most major Wi-Fi CPE vendors currently have FWA solutions in their portfolios.
• Mesh Wi-Fi: Designed to address coverage and reliability issues, mesh networks consist of multiple interconnected nodes spread throughout the environment that extend connectivity beyond the core CPE hub. Many major vendors have created specific product lines dedicated to mesh products; these include Orbi from NETGEAR, Deco from TP-Link, and ZenWiFi from ASUS. Some have also built a portfolio entirely of mesh Wi-Fi products: eero from Amazon and Nest Wi-Fi from Google are the most high-profile examples.
• Optimization: There are many instances of vendors carving out a niche for themselves through Wi-Fi equipment optimization for specific applications. For example, there are numerous examples of routers optimized for gamers, including the ROG Rapture GT-AX10000, which is part of ASUS’ gaming-focused sub-brand aptly named the Republic of Gamers (ROG). German equipment vendor AVM, on the other hand, has developed a range of CPE optimized for working from home, with models such as the FRITZ!Box 7590 experiencing strong success with remote workers in their home market.   
• Value-Added Services: A final major area of differentiation is in the field of value-added services, such as Wi-Fi management, security, or even Wi-Fi sensing. These services are increasingly popular with ISPs, as they offer a low-cost method of greatly enhancing user QoE, in the process raising their value proposition to consumers. They can even be deployed remotely on existing CPE, allowing operators to enhance the functionality of their CPE without having to undertake the costly process of upgrading the physical equipment. Vendors that specialize in value-added services include Airties and Plume, both of which offer their services on their own proprietary hardware, as well as that of third parties.

Shifting our attention to the enterprise market, ABI Research is projecting a relatively faster rate of Wi-Fi 7 adoption in the enterprise market compared to the residential market, with annual shipments of the latest standard overtaking those of Wi-Fi 6 in 2027. There are various reasons for this, including the fact that enterprises are more accustomed to upgrading to the latest technology available during their periodic upgrade cycles, and that they are more in need of Wi-Fi 7’s new capabilities to alleviate network congestion and power new applications. That said, enterprise Wireless Local Area Network (WLAN) equipment vendors cannot rely on the allure of tri-band Wi-Fi 7 alone, and must keep the following in mind if they wish to create compelling value propositions for their customers:

• Software-Defined Radios: Equipping APs with radios that can be reconfigured between the 5 GHz and 6 GHz bands allows the adopting enterprise to both extract the maximum value from all of their radios today (when they may have little requirement for 6 GHz), while at the same time preparing their network for a 6 GHz tomorrow. This future-proofing of the network will help enterprises realize robust Return on Investment (ROI).
• Diversified Stock-Keeping Units (SKUs): The divergence between the demands of each industry vertical is increasing, and vendors must bear this in mind when developing their hardware solutions. This means that some verticals may favor more compact dual-band solutions, whereas others might require those with Standard Power 6 GHz-enabled external antennas.
• Proprietary Features: Similar to the above, there is an increasing need to develop targeted and unique proprietary features designed to address specific challenges within a particular vertical. Vendors will find that these will likely do more to support a vendor’s value proposition than merely adopting shared industry standards.

Although there is clearly a sizable market for dual-band Wi-Fi 7, the industry must tread a fine line in order to exploit these opportunities without diluting Wi-Fi 7’s value proposition. Whereas there was a clear delineation between dual-band and tri-band Wi-Fi 6 (Wi-Fi 6 and Wi-Fi 6E, respectively), the same is not true for Wi-Fi 7, and by not differentiating between the 6 GHz-enabled and non-6 GHz versions of the standard, the industry risks confusing the Wi-Fi customer base and damaging Wi-Fi 7’s overall brand. Consider the case of a consumer who purchases a 6 GHz-enabled Wi-Fi 7 device in the belief that they can pair it with their Wi-Fi 7 router to enjoy much improved connectivity, only to discover after purchase that their router is dual-band only, and therefore the new device operates no differently than one without 6 GHz compatibility. This disappointment would leave a sour taste in the consumer’s mouth, and they are unlikely to be satisfied with their purchase. To avoid this, both ISPs and retail-focused vendors must clearly communicate the capabilities of their equipment to customers, potentially introducing new separate branding (as in Wi-Fi 6 & 6E). Going beyond this, ISPs can look to proactively deploy cloud analytics to passively gain a deeper understanding of customer-specific demands, and can then target their deployments of 6 GHz-enabled Wi-Fi 7 equipment to customers with 6 GHz devices in their networks.