Apple Inc. (IW 500/2) has disbanded its division that develops wireless routers, another move to try to sharpen the company’s focus on consumer products that generate the bulk of its revenue, according to people familiar with the matter.
Apple began shutting down the wireless router team over the past year, dispersing engineers to other product development groups, including the one handling the Apple TV, said the people, who asked not to be named because the decision hasn’t been publicly announced.
Apple hasn’t refreshed its routers since 2013 following years of frequent updates to match new standards from the wireless industry. The decision to disband the team indicates the company isn’t currently pushing forward with new versions of its routers. An Apple spokeswoman declined to comment on the company’s plans.
Routers are access points that connect laptops, iPhones and other devices to the web without a cable. Apple currently sells three wireless routers, the AirPort Express, AirPort Extreme, and AirPort Time capsule. The Time capsule doubles as a backup storage hard drive for Mac computers.
The products, which cost $99, $199, and $299, respectively, make up a small slice of Apple’s revenue and are part of Apple’s “other products” category on its financial statements. The category, which includes the Apple Watch and Apple TV, generated $11.1 billion in fiscal 2016, or about 5% of total sales.
Exiting the router business could make Apple’s product ecosystem less sticky. Some features of the AirPort routers, including wireless music playback, require an Apple device like an iPhone or Mac computer. If the company no longer sells wireless routers, some may have a reason to use other phones and PCs.
The core of the technology in routers comes from chipmakers such as Broadcom Ltd. that advance Wi-Fi technology through developing the fundamental components. While router makers can differentiate the design of their products, the number of antennas and the software that controls them, they are reliant on advances first made by chipmakers to be able to offer new, higher-performing models.
Boon for Wireless Router Makers
Apple’s AirPorts have historically lagged behind those of companies such as D-Link Corp., Netgear Inc. and Belkin International Inc., which have rushed to adopt new standards. Apple, which has charged more for its routers, has focused more on integrating control of its devices into its computer operating system and industrial design. The company’s decision to leave the business may be a boon for other wireless router makers.
Earlier this year, Apple stopped making its own external monitors and in October introduced a new strategy by selling new high-resolution screens for professional users with LG Electronics Inc.
By Mark Gurman