Network Hardware Market - Global Forecast 2026-2032

The Network Hardware Market size was estimated at USD 163.15 billion in 2025 and expected to reach USD 172.72 billion in 2026, at a CAGR of 5.91% to reach USD 243.95 billion by 2032.

In recent years, enterprise network hardware has undergone a profound transformation driven by converging technological forces. As organizations grapple with rapidly expanding data volumes, the imperative to modernize network infrastructure has never been greater. The surge in artificial intelligence workloads has directly fueled demand for high-capacity, low-latency networking equipment. Cisco Systems reported that demand for its cloud networking gear, particularly ethernet switches and routers optimized for AI use cases, spiked markedly, prompting the company to raise its revenue forecast for fiscal 2025 to between $56 billion and $56.5 billion. This momentum underscores the critical role of network hardware in enabling next-generation applications, from real-time analytics to immersive virtual experiences.

Simultaneously, the proliferation of Internet of Things deployments and the transition to private and hybrid 5G architectures are reshaping connectivity paradigms. Enterprises in manufacturing, logistics, and smart city initiatives are moving beyond pilot phases and scaling private 5G networks as fundamental IoT backbones. This shift reflects an urgent need for ultra-reliable, low-latency connections that traditional Wi-Fi and Ethernet infrastructures cannot fully satisfy. As a result, network architects are forging new blueprints that blend wired and wireless technologies, embracing software-defined principles to dynamically allocate resources where performance demands are highest.

Layered atop these demands is the imperative of cybersecurity. With threat actors leveraging increasingly sophisticated tactics, network hardware must provide robust, proactive defense capabilities. This environment has spurred adoption of advanced firewalls, secure access nodes, and encrypted tunneling solutions that converge security functions closer to the data edge. Collectively, these drivers-AI acceleration, IoT scale, 5G rollout, and cybersecurity resilience-form the crucible in which the modern network hardware landscape is being forged.

The network hardware landscape is being redefined by several transformative shifts that have emerged as critical enablers of digital strategy. First, the integration of artificial intelligence into network operations has transitioned from concept to reality through innovations such as AI-on-RAN, where inference engines are embedded directly within radio access networks to achieve sub-5 millisecond latencies for applications like autonomous robotics and industrial monitoring. At MWC 2025, Fujitsu demonstrated successful real-time target tracking by running AI locally on the RAN, contrasting sharply with cloud-based implementations that suffered high latency.

Second, edge computing has risen to prominence, driven by the imperative to process data closer to the source. Industrial and IoT use cases now routinely leverage on-premise compute nodes to filter and analyze sensor data before it traverses the wider network. This not only reduces bandwidth costs but also ensures resilience against connectivity disruptions. Paralleling this is the maturation of network slicing, which enables operators to carve virtual network segments tailored to specific applications, ensuring guaranteed performance for critical functions like predictive maintenance.

Third, security paradigms are evolving toward zero-trust and post-quantum cryptography frameworks to safeguard increasingly distributed infrastructures. Early demonstrations of NIST-approved post-quantum algorithms embedded into subscriber identity modules highlight proactive efforts to future-proof encryption against emerging quantum threats. This shift signals a broader industry move toward continuous verification and cryptographic agility.

Finally, the convergence of networking and security is epitomized by Secure Access Service Edge (SASE) architectures that unify firewall, secure web gateway, and cloud access security broker functions into a single, cloud-delivered service. By collapsing network and security layers into cohesive platforms, organizations can simplify management and scale protections in tandem with the growth of distributed workforces and multi-cloud deployments. These shifts collectively usher in a new era of intelligent, resilient, and secure networking infrastructures.

United States trade policy decisions enacted in 2025 have exerted a tangible drag on network hardware profitability and operational planning. Nokia, for instance, revised its full-year 2025 profit guidance downward, attributing an anticipated €50 million to €80 million reduction in operating income directly to tariff impacts alongside currency headwinds. This adjustment underscores the stakes for multinational vendors whose global supply chains traverse tariff jurisdictions.

Cisco Systems has similarly contended with the financial ripple effects of U.S. tariff measures. In its fiscal third‐quarter earnings release, the company acknowledged that its adjusted gross margin forecast for the upcoming quarter incorporates the cost burden of ongoing China tariffs, while emphasizing proactive supply chain diversification to mitigate further exposures. Cisco’s strategic response underscores the balance between pricing discipline and supply resilience in a volatile trade environment.

Beyond direct hardware costs, potential extensions of semiconductor levies could further complicate network device economics. President Trump’s trade investigations have signaled possible tariffs on electronics containing foreign-made chips, heightening concerns among network equipment manufacturers and enterprise buyers alike. Should such measures materialize, price inflation on key components like ASICs and high-speed transceivers could cascade through product roadmaps, delaying planned upgrades and impeding the rollout of AI-optimized switches and routers.

In this context, enterprises are reevaluating procurement timing and vendor partnerships to buffer against tariff pass-throughs. Some organizations have accelerated orders to lock in favorable pricing, while others are exploring sourcing alternatives from non-tariffed regions. As trade policy continues to evolve, the ability to anticipate and adapt supply chain strategies will be paramount for sustaining network modernization initiatives.

A nuanced view of network hardware segmentation reveals divergent trajectories across product, component, end-user, organization size, deployment, and connectivity dimensions. Within the access point category, indoor solutions have rebounded from early 2024 inventory corrections, benefitting from widespread enterprise investments in Wi-Fi 6 and the initial rollouts of Wi-Fi 7 technology. According to 650 Group, indoor and outdoor access point revenues began recovering sequentially in mid-2024 as cloud-managed WLAN services grew 6% year over year, highlighting the ascendancy of software-centric wireless management models.

In the firewall segment, next-generation firewalls dominate growth, reflecting escalating cybersecurity demands. Palo Alto Networks reported a 34% year-over-year increase in next-generation security annual recurring revenue, crossing the $5.1 billion milestone in Q3 2025. This surge accentuates the shift toward AI-enhanced threat detection and unified security platforms, whereas traditional UTM solutions maintain relevance primarily among smaller enterprises seeking integrated simplicity.

For routers, the high-end market witnessed a 10% year-over-year expansion in Q1 2025, driven by robust service provider demand for both core and edge router deployments. This growth marks the first positive year-on-year performance since Q2 2023, underscoring recovery momentum as hyperscalers and telecom operators invest in network upgrades.

Switches have experienced an unprecedented surge as data center operators accelerate AI build-outs. IDC’s Quarterly Ethernet Switch Tracker reported a 32.3% year-over-year increase in global Ethernet switch revenues in Q1 2025, fueled by 54.7% growth in the data center segment and stabilized gains in enterprise campus networks.

Breaking down by component, product hardware remains the largest share but services and software are gaining ground. In Cisco’s fiscal Q3, product revenue rose 15% to $10.37 billion, while services grew 2.6% to $3.78 billion, illustrating that enterprises continue to invest heavily in active hardware even as network management and security software expand in strategic importance.

Across end users, financial services entities are modernizing networks to support real-time fraud detection and digital banking, fostering a 13.6% CAGR in ICT adoption within BFSI through 2030. Educational institutions leverage wireless infrastructures to enable digital learning environments, as evidenced by growing expenditures on campus Wi-Fi deployments. Manufacturing and telecom operators are scaling private 5G and IoT networks to underpin automation and provide differentiated service offerings.

When viewed through the lens of organization size, large enterprises prioritize core routers, managed switches, and next-generation firewalls to architect highly resilient multi-site networks. Medium enterprises gravitate toward hybrid-managed access points and software-driven security services to balance cost and performance. Smaller enterprises often adopt cloud-managed wireless APs and unmanaged switches, emphasizing simplicity and rapid deployment models that minimize operational overhead.

Deployment preferences reveal a clear pivot toward cloud-centric models. Cloud-managed WLAN services outperformed on-premises hardware in early 2024, reflecting enterprises’ desire for centralized network visibility and automated policy control. Finally, connectivity types illustrate a bifurcated market: wired Ethernet switch investments are surging to support bandwidth-intensive AI workloads, while wireless technologies-spanning Bluetooth, cellular, Wi-Fi, and emerging protocols like Zigbee-continue to expand the reach of edge networks in retail, healthcare, and smart building applications.

Geographic dynamics exert a profound influence on network hardware demand and vendor performance across the Americas, EMEA, and Asia-Pacific regions. In the Americas, where demand for AI-optimized data center infrastructure remains insatiable, networking vendors have captured outsized growth. Juniper Networks recorded $810.6 million in net revenues from the Americas in Q1 2025, reflecting an 11% year-on-year rise driven by hyperscaler and enterprise investments in high-capacity routers and switches. The region’s advanced digital economies and aggressive AI adoption cycles continue to underpin robust procurement pipelines, especially among cloud service providers and technology-driven enterprises.

In Europe, Middle East, and Africa, regulatory compliance and digital sovereignty concerns are reshaping procurement strategies. Operators and enterprises are navigating the EU’s NIS2 Directive and data residency mandates, prompting increased demand for vendor-neutral, interoperable networking solutions that ensure seamless cross-border data flows. The emphasis on security, resilience, and adherence to stringent privacy regulations has elevated the uptake of SASE platforms and next-generation firewalls in the region.

The Asia-Pacific market demonstrates a dual emphasis on rapid 5G expansion and large-scale IoT deployments. Governments and industry bodies are pioneering private and hybrid 5G networks, particularly in manufacturing hubs and smart city corridors, to support mission-critical applications. Designveloper estimates that private 5G infrastructures will form the backbone of IoT ecosystems across APAC, driving substantial hardware investments as organizations transition from pilot projects to full-scale rollouts. By balancing digital sovereignty objectives with growth ambitions, Asia-Pacific is forging a high-velocity trajectory in network modernization.

Leading vendors in the network hardware sphere exhibit distinct strategic trajectories shaped by technology imperatives and market forces. Cisco Systems has harnessed the AI wave to elevate its cloud networking portfolio, citing triple-digit order growth from hyperscalers and broadening demand among telecommunications customers for AI-focused routers and switches. Despite tariff uncertainties, Cisco’s supply chain diversification-having reduced China exposure by over 80%-has enabled the company to sustain margin resilience and expand its share repurchase program by $15 billion to reinforce investor confidence.

Juniper Networks, awaiting regulatory approval for its acquisition by Hewlett Packard Enterprise, reported a 11% year-on-year revenue increase to $1.28 billion in Q1 2025. CEO Rami Rahim highlighted robust order growth across cloud and campus networks, while CFO Ken Miller confirmed proactive tariff mitigation strategies designed to safeguard future earnings.

Palo Alto Networks has emerged as a cybersecurity benchmark, with its next-generation security ARR surging 34% year-on-year to $5.1 billion. The company’s strategic emphasis on AI-powered threat prevention and Secure Access Service Edge solutions underpins its ability to command premium pricing and capture critical share amid intensifying security budgets.

Nokia’s trajectory contrasts with peers, as the vendor trimmed its profit guidance for 2025, attributing €50 million to €80 million of operating profit drag to a weaker U.S. dollar and trade levies. This underscores the ongoing headwinds that tariffs and currency fluctuations pose across the industry.

HPE’s Aruba Networking unit continues to secure leadership in enterprise wireless, benefiting from the recovery of cloud-managed services and the ramp of Wi-Fi 6E and Wi-Fi 7 deployments. Meanwhile, Arista Networks has achieved a 27.1% increase in data center Ethernet switch revenues, solidifying its position as a key alternative to incumbent vendors in high-performance environments.

To navigate the multifaceted challenges and capitalize on emerging opportunities, industry leaders should adopt a portfolio of agile strategies. First, diversifying supplier footprints beyond tariff-exposed geographies is critical. Organizations must evaluate non-Chinese manufacturing hubs and strengthen partnerships with domestic and nearshore vendors to hedge against trade policy volatility and ensure supply chain continuity.

Second, extending the lifecycle of existing infrastructure can alleviate capital pressures. By implementing comprehensive preventive maintenance programs and leveraging firmware updates, enterprises can defer refresh cycles by 12 to 18 months without compromising performance or security. This approach provides immediate cost relief while preserving readiness for future upgrades.

Third, adopting a hybrid network architecture that balances on-premises and cloud-based resources enables optimized total cost of ownership. Enterprises should dynamically allocate workloads to the most cost-effective environment-leveraging on-premises gear for latency-sensitive tasks and cloud network services for scalable, consumption-based models.

Fourth, embracing software-defined paradigms-such as SD-WAN and intent-based networking-empowers rapid policy enforcement and granular traffic control. This flexibility reduces manual overhead and accelerates time to value for new applications, supporting continuous integration of AI and IoT use cases.

Finally, fostering a zero-trust security posture by integrating next-generation firewalls, micro-segmentation, and post-quantum cryptographic primitives will reinforce defense-in-depth. By converging networking and security operations into unified platforms, organizations can streamline incident response and maintain resilience against evolving threat vectors.

This research leverages a rigorous mixed-methodology framework to ensure comprehensive and accurate insights. Primary research was conducted through structured interviews with senior technology executives, network architects, and procurement leaders to capture firsthand perspectives on market drivers, supply chain dynamics, and emerging priorities. These qualitative inputs were triangulated with quantitative financial data sourced from earnings releases and regulatory filings of leading public companies.

Secondary research encompassed an extensive review of credible industry publications, market trackers, and analyst reports, including quarterly updates from Cisco, Juniper, and IDC’s Ethernet Switch and Router Trackers. Trade press, vendor whitepapers, and conference presentations (e.g., MWC 2025 demonstrations) provided context for technological innovations and adoption patterns.

Market modeling incorporated historical revenue analyses, segment calibration, and scenario planning to assess the impact of external factors such as tariffs and geopolitical shifts. Data integrity was maintained through cross-validation of multiple sources, while forecasting assumptions were stress-tested against alternative trade and technology pathways.

Methodological transparency is upheld through detailed documentation of data sources, definitions, and analytical techniques. This structured approach ensures that findings are grounded in verifiable evidence and can guide decision-makers with high confidence.

Network hardware stands at the nexus of technological innovation and strategic imperatives, shaping how organizations manage data, secure assets, and deliver transformative services. The confluence of artificial intelligence, 5G, edge computing, and evolving security frameworks has reset expectations for performance, agility, and resilience. Enterprises are now tasked with harmonizing cloud-first aspirations, on-premises requirements, and hybrid architectures to meet the dual demands of scale and latency.

Simultaneously, geopolitical forces such as tariffs and regulatory shifts have introduced complexity into procurement strategies, compelling organizations to adopt diversified supply chains and flexible sourcing models. Against this backdrop, segmentation insights reveal that access points, firewalls, routers, and switches are each on distinct growth trajectories, while services and software assume ever-greater roles in network modernization.

Regional nuances further underscore the need for adaptive strategies: the Americas lead in AI-driven deployments, EMEA navigates compliance imperatives, and Asia-Pacific accelerates private 5G and IoT initiatives. Leading vendors demonstrate divergent responses, from Cisco’s supply chain diversification to Palo Alto’s AI-centric security platforms and Juniper’s cloud-enabled networking offerings.

Looking ahead, success in the network hardware domain will hinge on an organization’s ability to integrate actionable intelligence, embrace software-defined agility, and maintain robust security postures. By synthesizing market insights with targeted investments, industry leaders can craft resilient, future-proof infrastructures that underpin digital transformation and competitive differentiation.

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