August 20, 2004 9:54 AM PDT

Analysts spot slump in LAN switch market

The market for local area network switches dipped 2 percent in the second quarter from the first quarter of the year, when 13 percent growth had been reported, according to data released by IDC on Friday.

But the LAN switch market is up 23 percent from the second quarter of last year, the market researcher said. Port shipments fell 1 percent sequentially but were up 34 percent over the same period last year.

"Despite the dip this quarter, we believe that 2004 will be a growth year for LAN switching, currently forecasted around 3 percent. Gigabit is certainly one of the main drivers, having already surpassed fast Ethernet in revenue terms in first quarter," Max Flisi, research analyst in IDC's Enterprise Networks program, said in a statement. "We expect this trend to continue as gigabit to the desktop and in datacenters becomes more prevalent."

Cisco leads the market with 69 percent market revenue share, followed by HP, Nortel, 3Com, Extreme Networks and Foundry Networks.

With the market maturing, equipment makers are addressing segments of the market such as security, government, financial services and small and midsize business.

The market researchers said 10 gigabit Ethernet ports, normally set up to aggregate gigabit connections, are also growing because of falling prices. Gigabit Ethernet saw sequential port shipment growth over last quarter, while fast Ethernet shipments declined. The 10GB market grew 24 percent sequentially in both revenue and port shipment terms. These ports are shipped by Foundry and Extreme.

 

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