
Netgear who are selling premium priced W6 routers in Australia has seen sales fall according to their latest financials, while globally sales of the Companies networking gear are down 14%, management claim they are now working on releasing W7 products globally.
In Australia the Company saw sales fall from $93M to $92M in 2021 but due to the high price of their products the business was able to lift profits to a $1.49M profit Vs a $164,000 loss in the prior year.
Globally the Company made a loss of $3.42M in the last quarter after sales fell $14% to US$249M.
Sales of the Companies premium priced Orbi, Nighthawk, Nighthawk Pro Gaming and Meural Brands, generated net revenue of $150.6 during the last quarter, this was down 27.8% on a year-over-year basis.
According to Patrick Lo, Chairman and Chief Executive Officer of Netgear the problem for the business is in the consumer market.
In Australia Netgear is selling a 3-pack router at JB Hi Fi consisting of router and two extenders for $1,549, while archrival D Link is selling a similar top end 3 pack W6 Wi Fi router for $549, or you can get their ‘Eagle Pro M32 AX3200 3-Pack’ $599.
The US business claims that they are still facing supply challenges with executives telling analysts recently that “Still short of supplying total unit for our high-end products which resulted in a less favourable mix of revenue and lower overall non-GAAP operating margin than expected”.
Executives claimed that the strengthening of the U.S. dollar over the past year has had a negative impact on their international revenue and our profitability.
Overall APAC revenue declined 9% and 1% year-over-year respectively.
Shipments of all wired and wireless routers and gateways came in at 786,000 units for the third quarter of 2022.
The net revenue split between home and business products was about 50% and 40% respectively.
The net revenue split between wireless and wired products was about 61% and 39% respectively.
Products introduced in the last 15 months constituted about 28% of third quarter shipments.
All products introduced in the last 12 months contributed about 25% of our third quarter shipments.
Since the start of Q4 2013, Netgear has spent $651.9 million to repurchase 18.9 million shares.
CFO Bryan Murray said that the business experienced a year-over-year decline in retail sales despite “elevated demand”.
Demand for their Super premium Wi-Fi mesh category grew in markets where super-fast broadband is available.
: We also saw continued strong demand for our leading 5G mobile hotspots in both the retail and service provider channels in the third quarter. But we were limited by supply of these higher margin products” he said.
“We remain confident that the super-premium Wi-Fi market, a market pioneered and led by Netgear and 5G mobile hotspots will continue to deliver growth into 2023” he said.
“I’m excited to share that SMB once again generated record net revenue of $99 million for the third quarter of 2022 which is up 21.3% on a year-over-year basis and up 4.9% sequentially”.
CEO Patrick Lo claimed that the Wi-Fi market at large has declined. We continue to execute on our strategy to shift more of our consumer CHP product sales towards meeting the needs of premium residential customers” he said.
Talking about the future he said “We believe we have a huge lead in radio frequency, analogue antenna and system design over our competition and we intend to use this to capitalize on future technology inflections. With the impending arrival of Wi-Fi 7, and extensive deployment of millimetre wave 5G, we believe we can expand our lead and continue to grow the market with higher ASPs and deeper penetration of this unique user segment”.
“To continue this leadership, we’re doubling down on our product investments in our high-end mesh and mobile hotspot products. To update our best-selling Orbi 850 Series, we recently introduced the Orbi 860 Series, our new Orbi 10-gig tri-band Wi-Fi 6 mesh system. This exciting new product features a tangy Ethernet port with support for multi-gig Internet connections, an upgraded antenna design for greater Wi-Fi performance and a one-year bundle of NETGEAR Armor, which protects all connected devices on the home network from incoming attacks and outgoing anomalies”.
He claimed that the new Orbi 860 mesh product was ideally suited for the latest icons and mesh, which remain the best Wi-Fi 6 performance, while they skip the interim step of Wi-Fi 6.
For many traveling business professionals, getting gigabit download speeds on the road, while keeping the connection private with our Nighthawk M6 and M6 Pro is priceless he concluded.