The Economic Value of Wi-Fi 6: A $500 Billion Market

“A Wi-Fi Alliance report estimated that global value attributable to Wi-Fi 6 by itself would grow from $57.9 billion in 2021 to a nearly tenfold increase of $527.5 billion in 2025.”

Wi-Fi 6Wi-Fi has been universally recognized as a term for non-cellular, wireless connectivity to the Internet for at least two decades, and reliance on Wi-Fi 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 Wi-Fi for bandwidth-intensive activities, such as streaming video, video conferencing during the COVID-19 pandemic, and the emerging “metaverse.”

Quantifying the Value of Wi-Fi

The convenience of Wi-Fi’s features and functionality to users is incredibly valuable from an economic perspective. For example, the Wi-Fi Alliance’s February 2021 “The Economic Value of Wi-Fi: A global view (2021-2025)” estimated that the global Wi-Fi 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 Wi-Fi 6 by itself would grow from $57.9 billion in 2021 to a nearly tenfold increase of $527.5 billion in 2025.

The Wi-Fi Alliance analysis identified a number of drivers of economic value from Wi-Fi for different stakeholders, including: (1) free Wi-Fi in public locations, particularly in emerging countries without developed cellular networks or extensive use of at-home Wi-Fi networks; (2) residential Wi-Fi for connected devices (e.g., “smart home” features, such as security systems) to access the Internet; (3) enterprise Wi-Fi 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 Wi-Fi re-routing and revenue of Wi-Fi commercial providers; and (5) manufacturers of and Wi-Fi ecosystem companies for Wi-Fi devices and equipment, IoT networks, and AR/VR solutions.  Indeed, the Wi-Fi Alliance’s analysis determined that “a country’s economic development is directly linked to the value of Wi-Fi,” as shown in its country-by-country chart. However, the analysis noted that there are different strengths of association between the value of Wi-Fi and the economic development in certain countries. Indeed, the value of Wi-Fi 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 Wi-Fi.

Wi-Fi 6 Will Continue the Trend of Sharply Increasing Value of Wi-Fi

Looking forward, the Wi-Fi Alliance determined that Wi-Fi 6 will have an “accelerating effect” to the economic value of Wi-Fi in the United States. Indeed, the analysis estimated that the economic value in the United States from Wi-Fi 6 would increase more than 10 times, from $16 billion in 2021 to $187.4 billion in 2025.  The Wi-Fi 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 Wi-Fi, 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 Wi-Fi dependency. The Wi-Fi 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 Wi-Fi 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 Wi-Fi 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 Wi-Fi 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 Wi-Fi Alliance (citing Opensignal) estimated that wireless users in the United States, the country with the widest Wi-Fi adoption and use in the world, increased their communications time using Wi-Fi from 56.2% to 59.9% in less than a year. This is consistent with Cisco’s Visual Networking Index: Global Mobile Data Traffic Forecast Update, 2017-2022, in which Cisco predicted mobile traffic (on both cellular networks and Wi-Fi) would increase from approximately 20 exabytes per month in 2017 to 180 exabytes per month in 2022. Because of this significant growth, reliance on each of cellular and Wi-Fi connectivity has increased, and will likely continue to increase. For example, while this Cisco analysis predicted that the offload traffic from mobile devices to Wi-Fi would increase from 54% in 2017 to 59% in 2022, the traffic growth on cellular networks also increased more than six times, from 11.5 exabytes per month in 2017 (which itself was a large increase from 6.7 exabytes per month at the end of 2016) to 77.5 exabytes per month in 2022. 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 Wi-Fi 6 as becoming increasingly valuable.

Looking Ahead to the Impact of Wi-Fi 6

Wi-Fi 6 is predicted to take the significant value of existing Wi-Fi 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 Wi-Fi 6 space. As noted above, the relatively few corporations driving Wi-Fi 6 innovations will be significant beneficiaries of this value of Wi-Fi 6 since standard essential patents necessarily will be infringed by implementers of Wi-Fi 6.

Image Source: Deposit Photos
Image ID: 3993353
Author: Lumumba 

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3 comments so far. Add my comment.

  • [Avatar for Anon]
    Anon
    December 9, 2022 04:21 pm

    F22strike,

    Careful there, as your advice is exactly what the infringers want you to do.

  • [Avatar for Roderick]
    Roderick
    December 9, 2022 12:00 pm

    I am not convinced that SEP payments should go up as WiFi becomes more valuable, but rather as the number of users increase and the number of licensees increases. Participants in standardization are allowed to build a cartel for the common good, to set one standard using one set of patents. In exchange, they have to offer their patents at a fair rate based on the value of the patented technology – not the value of having just one standard for everybody.

    Thanks for your consideration.

  • [Avatar for F22strike]
    F22strike
    December 9, 2022 11:12 am

    I would strongly advise US companies against investing in Wi-Fi research and development. Any valuable inventions that come out of such efforts and are subsequently patented in the US will be stolen by US big tech and by foreign companies.

    As one example, consider the fact that Caltech owns patents on Wi-Fi inventions that are widely infringed, yet it has had to endure at least ten IPRs. Years of federal court litigation in an effort to enforce these patents against Apple, Broadcom, Microsoft, HP and Dell have so far not produced any damage recoveries or license fees despite the fact that the asserted claims have survived multiple serial IPRs.

    See U.S. Patent Nos. 7,116,710; 7,421,032; 7,716,552; 7,916,781; and 8,284,833

    The US patent system is broken. US big tech has prevented any meaningful reform of the US patent system. Don’t file any US patent applications – you are wasting your money!

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