Growth expected for switches, wireless LANs

The Ethernet switch market will return to strong growth in 2004, and the wireless LAN market will continue its run, according to a series of five-year forecast reports recently released by Dell’Oro Group.

The projections for Ethernet switches show slow but steady growth – in the single digits – through 2008, starting with 7% in 2004. Reasons include an improving economy, as companies look for inexpensive products that enable new applications, Dell’Oro says. Switch vendors are starting to include more features in their products without raising the prices, so users get more for their money and can use those features to improve their networks and add VoIP.

Meanwhile, the WLAN market is set to grow 23% this year, to $2.2 billion. Dell’Oro says growth should also be good next year – but afterwards, growth should slow substantially, come to a halt and start declining in 2007.

Interestingly, Dell’Oro bases this reasoning on a prediction that WLAN functionality will become embedded in other products. Cable modems and DSL equipment will have WLAN features, so users won’t have to buy separate wireless gear. Plus, WLAN support is becoming standard equipment on notebook computers, so people won’t be buying as many separate WLAN cards for them.

Also, Dell’Oro says the worldwide router market will grow 6% a year, on average, over the next five years – from $6.3 billion in 2003 to $8.6 billion in 2008. The research firm says the last six months were a “turning point” for the market, which had been declining for several years.