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Ethernet switch, router market show opposing trends

Posted: 06 Jun 2013     Print Version  Bookmark and Share

Keywords:Ethernet switch  router tracker  GbE  IDC 

The global Ethernet switch market (Layer 2/3) posted Rs.28,387.10 crore ($5.28 billion) in revenues for 1Q13. According to International Data Corp. (IDC), this is 2.1 per cent higher than same quarter last year. However, if we compare the number with 4Q12's figures, the market dropped 7.6 per cent.

The global router market, on the other hand, isn't faring as well. The market was weak with a decrease in both YoY and QoQ figures of 7.9 per cent and 13 per cent respectively.

IDC's Worldwide Quarterly Ethernet Switch and Router Tracker noted that from a geographic perspective, the first quarter results found the Ethernet switch market was particularly strong in China where it increased 10.6 per cent YoY, followed by Central and Eastern Europe, which was up 10.3 per cent YoY. As a region, APAC (excluding Japan) came in with a 6.6 per cent increase, while the United States also performed relatively well in 1Q13 with an increase of 3.5 per cent YoY. Western Europe remained an area of weakness, declining 6.2 per cent YoY. On a positive note for Western Europe, this was an improvement over the double-digit YoY declines experienced in 3Q12 and 4Q12.

"While 10GbE continues to drive the worldwide Ethernet switch market, it is interesting to note the increasing divergence in the performance of the overall market across the various regions, and in some cases, specific countries," said Rohit Mehra, vice president, network infrastructure at IDC. "While GbE is still expected to hold its own for the foreseeable future, we expect 10GbE and 40GbE to drive the wired infrastructure market forward in the coming years, both in the datacentre as well as campus core deployments. But as the market evolves, we should expect there will be pronounced market differences across the various theatres."

10Gb Ethernet switch (Layer 2/3) revenue increased 12.9 per cent YoY to $1.87 billion while 10Gb Ethernet switch port shipments grew 37.6 per cent YoY to 3.9 million ports in 1Q13. 10GbE continues to be the primary driver of the overall Ethernet switch market.

The worldwide Layer 4-7 switching market lost some momentum in 1Q13 and decreased 4.3 per cent YoY. This was the first annual decline in more than three years.

Ethernet vendors

Source: IDC

The worldwide enterprise and service provider Router market declined 7.9 per cent YoY and 13.0 per cent sequentially in 1Q13. As with the Ethernet switch market, IDC saw very uneven performance across major geographies and countries this quarter. Asia/Pacific (excluding Japan) actually grew 4.2 per cent YoY in 1Q13 while North America and the Middle East and Africa (MEA) regions were down only low single digits on an annual basis. Elsewhere, Japan, Latin America, and Western Europe all declined by more than 20 per cent YoY. Specifically, Japan fell by 24.8 per cent, Latin America by 22.5 per cent, and Western Europe by 20.5 per cent YoY, each a significant market move by any standard.

From a vendor perspective, Cisco's Ethernet switch (Layer 2/3) market share in 1Q13 came in at 62.7 per cent reflecting a year-over-year decrease from 64.1 per cent in 1Q12, but a solid increase from 61.4 per cent Cisco held in the previous quarter. Cisco's market share in the fast growing 10GbE market segment was 66.7 per cent in 1Q13.

"While enterprise mobility is no doubt an area of focus for IT and network managers, the underlying wired infrastructure is also continuing to get mindshare, both in the enterprise campus as well as the datacentre, especially as IT looks to improving the application experience for enterprise users," said Petr Jirovský, senior research analyst in IDC's networking trackers group. "That said, the need to support a growing and diverse set of wired and wireless devices at the network edge will continue to keep the enterprise networking market relevant over the longer term."

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