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Ethernet Extender - Recovery Underway in Ethernet Switch Market
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March 29, 2010

Recovery Underway in Ethernet Switch Market

By David Sims
TMCnet Contributing Editor


Good news for those in the Ethernet switch market: Research firm Infonetics Research (News - Alert) has released three enterprise networking market reports with new fourth-quarter and year-end data.

The reports find that the markets have improved “significantly” from the bad days of early 2009. The Ethernet switch market had a strong rebound in 4Q09, growing 15 percent sequentially to $4.2 billion.

The report also includes vendor market share, analysis, and forecasts: Ethernet Switches, Enterprise Routers, and Wireless LAN and WiFi Mesh equipment and phones.

And Cisco (News - Alert) did “a remarkable job defending their enterprise router market share in a difficult year,” the report’s author say: “Their unit share decreased only 1 point, and their revenue share actually increased a point.”

In related news, TMC’s Paula Bernier (News - Alert) has reported that AT&T announced plans to roll out its 3G MicroCell solution, which it developed with Cisco, beginning in mid-April. It allows for the routing wireless phone calls and data connections across a home broadband connection.

“The Ethernet switch, enterprise router, and wireless LAN equipment markets have improved significantly from the lows set in the first half of 2009, but are still down overall in 2009 compared to 2008,” said Matthias Machowinski, directing analyst for enterprise voice and data at Infonetics Research.

With the economic recovery under way, “we expect sales to rise across the board in 2010 and beyond as companies make necessary infrastructure investments and slowly expand again,” Machowinski said.

On a year-over-year basis (4Q08 to 4Q09), Ethernet switch port shipments are up four percent, the report found, as well as that the demand for new Ethernet switches continued in 2009, “but buyers migrated to lower cost switches, which hurt revenue.”

And yes, despite taking a dive along with the rest of the market in 1Q09, the 10G Ethernet switch segment recovered well, with worldwide revenue growing 63 percent in 2009 over 2008

Overall worldwide enterprise router revenue had strong sequential growth in 4Q09, up 10 percent from the previous quarter to $821 million, but revenue is down 28 percent for the full year of 2009, just barely above $3 billion, the report found.

The report called 3Com (News - Alert) “the big success story in 2009,” as the only vendor to increase enterprise router revenue in 2009, based on the success of their H3C brand.

David Sims is a contributing editor for TMCnet. To read more of David’s articles, please visit his columnist page. He also blogs for TMCnet here.

Edited by Marisa Torrieri

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