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The Economic Value of WiFi 6: A $500 Billion Market

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Update time : 2022-12-12 14:45:40

WiFi has been universally recognized as a term for non-cellular, wireless connectivity to the Internet for at least two decades, and reliance on WiFi has been increasing as more devices become "connected," such as smart outlets, TVs, audio systems, and the like, in a connected household. Similarly, consumers have become more dependent on the bandwidth of WiFi for bandwidth-intensive activities, such as streaming video, video conferencing during the COVID-19 pandemic, and the emerging "metaverse."

Quantifying the Value of WiFi

The convenience of WiFi's features and functionality to users is incredibly valuable from an economic perspective. For example, the WiFi Alliance's February 2021 "The Economic Value of WiFi: A global view (2021-2025)" estimated that the global WiFi economic value in 2021 would be $3.3 trillion and would increase to $4.88 trillion by 2025, with approximately 30% of the economic value attributable to the United States. Notably, the report estimated that global value attributable to WiFi 6 by itself would grow from $57.9 billion in 2021 to a nearly tenfold increase of $527.5 billion in 2025.

The WiFi Alliance analysis identified a number of drivers of economic value from WiFi for different stakeholders, including: (1) free WiFi in public locations, particularly in emerging countries without developed cellular networks or extensive use of at-home WiFi networks; (2) residential WiFi for connected devices (e.g., "smart home" features, such as security systems) to access the Internet; (3) enterprise WiFi to support a significant portion of enterprise broadband traffic and productivity gains, particularly for IoT and AR/VR applications; (4) Internet service providers who rely on WiFi re-routing and revenue of WiFi commercial providers; and (5) manufacturers of and WiFi ecosystem companies for WiFi devices and equipment, IoT networks, and AR/VR solutions.  Indeed, the WiFi Alliance's analysis determined that "a country's economic development is directly linked to the value of WiFi," as shown in its country-by-country chart. However, the analysis noted that there are different strengths of association between the value of WiFi and the economic development in certain countries. Indeed, the value of WiFi in certain developing nations exceeds that of some advanced economies due to the lack of developed cellular infrastructure and higher cellular costs in emerging countries, and a greater digital divide in emerging nations that is reduced with free public WiFi.


WiFi 6 Will Continue the Trend of Sharply Increasing Value of WiFi

Looking forward, the WiFi Alliance determined that WiFi 6 will have an "accelerating effect" to the economic value of WiFi in the United States. Indeed, the analysis estimated that the economic value in the United States from WiFi 6 would increase more than 10 times, from $16 billion in 2021 to $187.4 billion in 2025.  The WiFi Alliance predicts similar trends in other countries around the world from 2021 to 2025, including the UK (increasing from $1.9 billion to $10.7), France ($1.3 billion to $9.0 billion), Germany ($1.9 billion to $15.3 billion), Spain ($0.6 billion to $4.5 billion), Poland ($0.2 billion to $5.7 billion), Japan ($5.4 billion to $28.7 billion), South Korea ($2.1 billion to $13.4 billion), among others.


The COVID-19 pandemic has had significant impacts on the use and, therefore, the value, of WiFi, and even as the world returns to certain pre-pandemic activities, the lessons learned and changing social behavior during the pandemic will likely have an impact on future WiFi dependency. The WiFi Alliance's economic analysis noted that, while GDPs for leading countries around the world contracted due to work closures and supply chain issues during the pandemic (the WiFi Alliance referenced the International Monetary Fund's finding that the pre-COVID 2020 growth in the United States was 1.90%, but the post-COVID 2020 growth was -4.30%), worldwide reliance on WiFi increased due to remote work and increased video consumption in place of in-person workplaces and activities. For example, in place of in-person meetings and activities where an individual was more likely to use cellular networks because of a person's movement from location to location, the reduced mobility of individuals confined to their homes encouraged Internet device users to rely more heavily on WiFi access points. Similarly, whereas many meetings and discussions took place in person prior to the COVID-19 pandemic, a larger percentage of meetings were hosted on video meeting platforms, demanding high-speed and high-bandwidth connections for instant, high-capacity video transmissions.


Quantitatively, the WiFi Alliance (citing Opensignal) estimated that wireless users in the United States, the country with the widest WiFi adoption and use in the world, increased their communications time using WiFi from 56.2% to 59.9% in less than a year. Because of this significant growth, reliance on each of cellular and WiFi connectivity has increased, and will likely continue to increase. Thus, even as the world makes steps to return to pre-pandemic levels, these trends, which may have been accelerated by the pandemic, still point to WiFi 6 as becoming increasingly valuable.


Looking Ahead to the Impact of WiFi 6

WiFi 6 is predicted to take the significant value of existing WiFi and accelerate value, use, and incorporation around the world going forward. As such, it will likely be a significant driver of worldwide economic value for those companies within the WiFi 6 space. As noted above, the relatively few corporations driving WiFi 6 innovations will be significant beneficiaries of this value of WiFi 6 since standard essential patents necessarily will be infringed by implementers of WiFi 6.



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