• United States

Ethernet switch market charges ahead

Nov 22, 20052 mins

* Markets for Ethernet switches, enterprise WLAN gear are up

If sales continue at the same pace through the end of this year, the Ethernet switch market will create a new high-water mark for revenue in 2005, according to Dell’Oro Group.

The research firm says the previous market revenue peak was in 2000 – at the height of the dot-com bubble – and it hasn’t been the same since. But sales of Ethernet switches have been steadily picking up. Revenues were up 8% from the first quarter of this year to the second, and up 7% from the second quarter to the third, when it reached $2.3 billion.

Plus, shipments of Gigabit and 10 Gigabit ports are up, and since they’re more expensive than Fast Ethernet ports, they raise the average selling price for the overall switch market.

Cisco of course leads the market, but Nortel is ranked second, which is remarkable given the turmoil there in recent years. According to Dell’Oro, HP is third, followed by Foundry Networks, Extreme Networks and 3Com, in descending order.

Meanwhile, Dell’Oro says the enterprise WLAN market grew 9% from the second quarter to the third, to $249 million. The research firm says the growth mainly came from sales of wireless switch/server/appliances. Those revenues increased 22%.

Sales of small office/home office WLAN gear grew just 2%, which Dell’Oro notes is much slower than the double-digit increases the market saw in the third quarters of the past two years. The firm places the blame for that slowdown on increased competition from DSL customer premises equipment that has WLAN capability integrated. Plus, users are reluctant to upgrade until products based on IEEE 802.11n are available.