10G Ethernet shines during sleepy Q1 switch market

BOSTON, Massachusetts, June 5, 2008—Communications market research firm Infonetics Research reports that sales of Ethernet switches decreased 4% sequentially in the 1st quarter of 2008, but are up 9% year-over-year from the 1st quarter of 2007, indicating a healthy overall switch market. The 1st and 4th quarters are typically down quarters for the Ethernet switch market.

Infonetics’ report, Ethernet and Application Switches shows the worldwide Ethernet switch market totaled $4.3 billion in 1Q08, and worldwide revenue is expected to post slow, incremental growth each year through at least 2011.

“Fears of economic uncertainty impacting the switch market aren't panning out so far; while some vendors posted dismal sequential results, much was attributable to seasonality, and other vendors picked up whatever slack was left. At this point, we don't have any solid evidence-based reasons to reduce our outlook for this market,” said Infonetics Research’s Matthias Machowinski, directing analyst for enterprise voice and data.

Other report highlights:

Most segments of the Ethernet and application switch market in 1Q08 were flat to down, although most are up on a year-over-year basis
2 emerging segments bucked the downward trend and posted strong double-digit growth in 1Q08: fixed managed layer 10G Ethernet ports and 1G Ethernet unmanaged ports
Another bright spot in the Ethernet and application switch market in 1Q08 was a general rise in average selling prices (ASPs) for most categories and port speeds
Cisco's Ethernet switch revenue was down 1% sequentially in 1Q08, but this was a good performance considering many leading competitors had double digit decreases
Worldwide application switch revenue declined 7% in 1Q08 from 4Q07, in-line with expectations; year-over-year, revenue is up 18%

Infonetics’ report tracks application switches and Ethernet switches broken out by fixed configuration (unmanaged vs. managed with a layer 2 vs. layer 3 split), chassis, and PoE by form factor and speed. Market share, which is now shown in flexible pivot tables, and forecasts are updated quarterly and cover all regions. Companies tracked include 3Com/H3C, Adtran, Alcatel-Lucent, Blade, Cisco, Citrix Netscaler, D-Link, Extreme, F5, Force10, Foundry, Huawei, Linksys, NETGEAR, Nortel, ProCurve, Radware, SMC, and others.