Revealed: Surprises in the 4Q08 Ethernet switch market

This week data networking and telecom research firm - Infonetics, released a report on the 4Q08 Ethernet and Application Switch market, revealing a few surprises.

According to Matthias Machowinski - Infonetics Directing Analyst for Enterprise Voice & Data:

"The North American Ethernet switch market was actually up both sequentially and year-over-year (up 2.6% in 2008 over 2007, and up 1.4% quarter-over-quarter in 4Q08), somewhat surprising given that this region is generally blamed for the current worldwide economic woes."

How so? Well according to Machowinski:

"Manufacturers were able to shift the sales mix to higher priced products. If this trend sustains, it should help with profit margins in what is expected to be tough year ahead."

The Infonetics report highlighted two more bright spots in the Ethernet switch market:

Continuing with the good news, the worldwide Ethernet switch market grew 5% to $18.2 billion in 2008 from 2007, however the winners in 4Q08 were Adtran and Alcatel-Lucent, both posting strong revenue increases, and Nortel and Extreme, both showing good performance given the difficult economic climate.

Additionally, the report revealed that in the newly tracked web-managed Ethernet switch segment, 3Com/H3C is the worldwide market share leader, followed by NETGEAR and ProCurve.

Reporting on the negative side:

Starting strong in early 2008 but decelerating in the latter half, the worldwide Ethernet switch market is down 2% 4Q07 to 4Q08 and down 7% 3Q08 to 4Q08 (Cisco accounted for much of the overall worldwide Ethernet switch market decrease in 4Q08, with revenue down 5.7%). The application switch market dropped 4% to $272 million in 4Q08, a sign of more to come for this market due to the high exposure to financial services.

Finally the report concludes that most application switch vendors had a down quarter, however there were two notable exceptions: Citrix and Radware.

What's your take on the surprises revealed in the Infonetics 4Q08 Ethernet and Application Switch report?

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• Cisco
• Data Center
• LANs / WANs
• Application switch vendors
• Data networking and telecom research firm - Infonetics
• Infonetics 4Q08 Ethernet and Application Switch report
• Matthias Machowinski - Infonetics Directing Analyst for Enterprise Voice & Data
• Web-managed Ethernet switch