sandalwood

Executive Summary

In early 2026, China's online router market entered a saturated phase with rising ASPs. Growth is now driven by premiumization, scenario-based use, and smart features.

Pricing: Sub-¥100 shrinks; ¥100–150 leads volume; >¥500 drives ~25% of revenue as the high-end core. Products: Mesh/whole-home routers shift demand from basic networking to comprehensive smart solutions. Tech: Wi-Fi 7 captures 30% share, leading the upgrade trend.

Moving forward, Wi-Fi 7, the >¥500 segment, whole-home coverage, and AI networking will define future growth.

1. Premiumization, Scenario-Based Use, and Smart Features in a Saturated Market

In 2026, the widespread adoption of next-gen Wi-Fi standards has triggered a new router replacement cycle. Concurrently, ongoing government initiatives to upgrade gigabit optical networks have enhanced home connectivity, further driving demand for high-performance routers.

Driven by this trend, leading manufacturers are focusing on premium, scenario-specific, and smart products:

• Huawei: Launched the Lingxiao Q7 Powerline Mesh Kit, featuring wiring-free whole-home gigabit PLC networking, Wi-Fi 7+, and NearLink dedicated gaming links. It targets large homes, multi-room coverage, and low-latency scenarios.
• ASUS: Released a Wi-Fi 7 AI gaming router with a dedicated AI Core, utilizing AI for game acceleration, device recognition, smart QoE, and interference scanning.
• Qualcomm: Its Wi-Fi 7/Home Networking Platform emphasizes Network AI, Edge AI, and intelligent traffic optimization.

The integration of AI is transforming routers from passive connectors into intelligent gateways that actively allocate bandwidth, detect risks, optimize routes, and manage endpoints.

Amid this crucial structural adjustment, Sandalwood data shows that in Q1 2026, online router sales volume dropped 11.6% YoY, revenue fell 8.5% YoY, and ASP rose 3.5% YoY to ¥214. Under saturated competition, upgrades toward premiumization, scenario-based applications, and smart features have become key breakthroughs for manufacturers.

2. Sub-¥100 Segment Shrinks; >¥500 Becomes Value High Ground

The sub-¥100 segment and legacy Wi-Fi 5 models are rapidly exiting the online router market. This generational shift is driving a structural transition toward "mainstream price upgrades + premium value release."

Q1 2026 pricing data shows:

• ¥0–100: Volume share dropped to 12.3% (-6.4pct), signaling a clear contraction in entry-level demand.
• ¥100–150: Volume share rose to 37.5% (+10.1pct), becoming the largest volume base by absorbing shifting low-end and mainstream replacement demand.
• ¥150–200: Volume share fell to 21.9% (-4.7pct), indicating that competition at the ¥100 level is increasingly concentrating in the ¥100–150 range.
• ¥200–500: Changes remained limited, continuing to mainly house performance-driven Wi-Fi 6 and entry-level Wi-Fi 7 products.

More notably, the >¥500 premium segment:

• Its volume share increased to 6.4% (+1.0pct), while revenue share surged to 25.2% (+4.2pct), contributing roughly a quarter of total online router sales revenue.
• This tier concentrates high-end configurations like Wi-Fi 7, whole-home/Mesh kits, high-speed backhaul, and powerline solutions. It is also the primary price band for pioneering new capabilities such as AI traffic scheduling, smart security protection, and device recognition. Consequently, it serves as a critical breakthrough for manufacturers aiming to improve product mix and profitability in a saturated market.

3.Whole-Home Routers Drive High-End Growth, Creating Greater Room for AI Implementation

In the high-end market, whole-home/Mesh routers have emerged as a representative growth driver.

As large and multi-story homes become more common, the growing number of connected devices (TVs, PCs, smartphones, security cameras, robot vacuums, smart speakers) makes it increasingly difficult for a single router to provide stable whole-home coverage.

Unlike standard standalone routers, Mesh kits use multi-node networking to ensure seamless coverage across different spaces and enable automatic device roaming between nodes. This effectively resolves traditional pain points like weak wall penetration, poor signals, and instability with multiple devices.

As multi-node networking becomes more complex, AI capabilities—such as device recognition, node scheduling, network self-optimization, and fault diagnosis—have greater room for implementation, elevating whole-home routers from mere "coverage tools" to comprehensive smart home network solutions.

Data confirms this trend: In Q1 2026, although online Mesh kit sales volume dropped 9.3% YoY, revenue grew 6.6% YoY. The ASP rose 17.6% YoY from ¥713 to ¥838. In the >¥500 premium segment, Mesh kits account for 68.0% of sales volume and 83.5% of sales revenue.

Regarding brand competition: Huawei holds a leading position, leveraging its terminal hardware, HarmonyOS ecosystem, and smart home entry points to further consolidate its advantage in whole-home networks and high-end kits. Xiaomi, TP-Link, and ZTE continue to focus on smart home ecosystems, cost-effective networking solutions, and technology-driven products.

4. Wi-Fi 7 Accelerates Adoption, Widening Brand Tech Gaps

The online router market is entering a rapid adoption phase for Wi-Fi 7. In Q1 2026:

• Wi-Fi 7: Volume share reached 28.4% (+10.1pct) and revenue share hit 45.2% (+13.4pct), becoming the core standard driving market value upgrades.
• Wi-Fi 6: Remains the volume base (>50%), but its ASP dropped ~11% YoY as it transitions from a "premium" to a "mainstream" standard.
• Wi-Fi 4 & 5: Are rapidly exiting the market.

This generational shift has not only changed product structures but also brand competition. The varying pace at which different brands are pushing Wi-Fi 7 reflects their strategic choices in a saturated market:

• Niche/Pro Brands: Wi-Fi 7 penetration nears 80%, leveraging technology to capture high-end positioning.
• Mainstream Brands: Maintain a dual-track strategy with Wi-Fi 7 penetration at 26%-33%, using Wi-Fi 6 for scale and Wi-Fi 7 for premium upgrades.
• Lagging Brands: Still rely on Wi-Fi 4/5 for over 50% of sales, facing increasing pressure from technological gaps.

Conclusion
Long-term router competition will extend beyond hardware specs to smart experiences. AI will increasingly enable self-configuration, optimization, healing, and security, offering users easier setup, stable multi-device connections, and proactive protection. Low-cost products are no longer the sole answer; instead, Wi-Fi 7, the >¥500 premium segment, whole-home/Mesh networking, and AI capabilities will jointly define the next phase of industry growth.