Struggling network Company Netgear has moved to appoint a new distributor in Australia as the Companies global revenues slump over 27% with their local operation net revenue slumping 40%.

The Company that sells expensive connected home wireless routers, has been struggling for some time, with their APAC region of which Australia is their biggest market struggling with revenue in the Connected home market, falling significantly from US$17.8M to $11.72.

In the SMB market the US network Company saw revenues fall from US$99m to $70.5M locally.

Combined Netgear revenues for APAC fell from $249.5M to $197.8 a slump of over $50M.

Local regional Marketing Director Sarah Dali who was appointed into the role at Netgear after a short stint at Samsung, has not explained the reason for the consistent slump in Netgear’s local sales which has been falling for several quarters with the 40% drop among the worst ever for the business since she was appointed into the role.

The Global Marketing Manager is Hedi Cormack who is based in Sydney.

MadisonAV claims that they are taking over as a specialised distributor of Netgear AV Managed Switches and associated accessories in the Australian market.

The Company that sells Orbi mesh gateways, 5G mobile hotspots, and Pro AV switches is trying to position themselves as a premium player in the market with the Company moving to lift prices in 2024 as they launch new products.

Patrick Lo, Chairman and CEO claimed that products introduced in the last 15 months constituted around 16% of their third quarter shipments, while products introduced in the last 12 months contributed 11% of third quarter shipments.

While Orbi 8 and 9 tri- and quad-band WiFi mesh products and 5G Nighthawk mobile hotspots are continuing to perform well in the USA, it appears that sales of these products are struggling in Australia.

The 3 pack Orbi AXE11000 Quad-Band Mesh Wi-Fi 6E System is selling for $2,799 at JB Hi Fi a 2 pack $2,099 vs significantly cheaper options from their competitors.

IN Q3, the U.S. retail market grew double digits sequentially, while the Australian market struggled.

Executives claim that their WiFi 7 offering is gaining traction with the business punting on higher margins.

Net revenue in the USA was $141 million, a decline of 16.7% year-over-year and up 20.9% on a sequential basis. EMEA net revenue was $35.7 million, a decrease of 20.4% year-over-year and down 1.3% quarter-over-quarter. APAC net revenue was $21.1 million which is down 40.3% from the prior year.

This was the worst slump ever for the US Company.

The Company shipped a total of approximately 1.8 million units, including 991,000 nodes of wireless products. Shipments of all wired and wireless routers and gateways combined were about 520,000 units for the third quarter of 2023. The net revenue split between home and business products was about 64% and 36%, respectively.

Overall gross margins were 35% claims Lo, who said that the business was working with retail channel partners to rightsize the inventory levels that have plagued the Company to date.

The Nighthawk WiFi 7 router, RS700, was the Companies number one selling premium router, overtaking our previous top-of-the-line WiFi 6E router, the RAXE500.

The business is relying on a strong pipeline of WiFi 7 introductions in 2024 across all our major product lines to lift sales next year.

Lo believes that as more WiFi 7 products launch in 2024 the business will be able to lift prices even further in an effort to further improve our overall gross margin in the new year.

Despite a downturn in Australia of 40% Lo is still predicting “headwinds in the next 3 quarters” as inventory costs go up.

He said, “We will continue to work on better product mix, cost containment and new product introductions to mitigate some of the negative effects”.

He added ” We have seen some of our large markets…face macro uncertainty from geopolitical tensions, high interest rates and sluggish economic growth. This is impacting our SMB business in these markets and causing our channel partners to lower their inventory carrying levels which will limit the top line potential of SMB in the coming quarters”.

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