Networking vendor Netgear is seeing mixed results fiscally as the company faces headwinds in some markets for its small and medium business (SMB) users. While there are challenges, the company is betting its future on the next generation of wireless technology as Wi-Fi 7 begins to roll out.

In its recent fiscal third-quarter financial results, Netgear reported a net revenue of $197.8 million. Although it’s a decrease of 20.7% from the comparable quarter in 2022, the amount still exceeded expectations.

In the context of the company's business segments, the connected home segment (CHP) displayed robust performance, bolstered by the successful launch of Netgear's Wi-Fi 7 products and strong demand for their premium offerings. However, the small and medium business (SMB) segment faced headwinds from high interest rates, geopolitical tensions and stagnant or negative GDP growth in major markets such as greater China, Germany and Japan.

While Netgear's overall SMB segment has struggled, CEO Patrick Lo sees reason for optimism.

"On the SMB side, our ProAV managed switches continued their year-on-year growth, with more commercial AV integrators and manufacturers adopting our easy-to-configure switches," Lo said during his company's earning call.

The ProAV switches are a newer part of the Netgear business portfolio, providing audio/visual transport over IP networks. Lo noted that the ProAV is being used for video conferencing control room displays, digital signage and lecture halls, among other use cases.

One of the newest parts of the ProAV portfolio is the M4350 managed switch that supports the new SMPTE 2110 protocol, which is emerging to become a critical protocol for deploying media over IP networks.

[caption id="attachment_135415" align="alignnone" width="400"] Netgear ProAV M4350. Image source: Netgear.[/caption]

Lo reserved his most optimistic comments for the next-generation Wi-Fi 7 technology that offers 2.4 times the speed of Wi-Fi 6, with the promise of up to 19 Gb/s of throughput.

Though Wi-Fi 7 is not yet a finalized standard, Netgear has already begun shipping several new routers that support the next-generation wireless protocol. Lo noted that Netgear has had the most successful launch of new Wi-Fi technology in company history, with its Wi-Fi 7 Quad-Band Orbi 970 and the Nighthawk RS700 routers. Of note, while Wi-Fi 7 routers are starting to come out on the access side, there aren’t many devices on the client side, such as phones or laptops, that support the new protocol yet.

"While Wi-Fi 7 clients are not widely available yet, the early technology adopters have clearly given us the stamp of approval," Lo said.

While the early market for Wi-Fi 7 is coming from the retail side, the direction is to grow the product portfolio for all Netgear’s users in the coming year. "We are readying a strong pipeline of Wi-Fi 7 introductions in 2024, across all our major product lines: Orbi mesh, Nighthawk routers, Nighthawk mobile hotspot and SMB insight access points," Lo said.