LAN switch, router markets to bounce back

While IDC predicts that the market for Ethernet LAN and routing gear will rebound this year from a 2001 slump, sales figures for the fourth quarter of last year show the road to recovery could be long.

The US$3.6 billion in the fourth quarter of 2001 worldwide LAN switch sales was down 25 per cent from the same quarter in 2000, a period which IDC identifies as the last quarter of growth before the industry went into a slump last year. World wide router sales were down 4.6 per cent in the fourth quarter of 2001, compared to the previous quarter while Ethernet switch revenue stayed relatively flat, growing by only 1.4 per cent.

A bright spot for the LAN switch market was Gigabit Ethernet switch sales, which were up 13.5 per cent from the fourth quarter of 2000, although IDC says this was below the expectations of vendors.

High-end router sales were also down significantly in the fourth quarter, dropping 37 per cent from the previous year. IDC says that while the slowdown in carrier equipment spending hurt router market, it was the drop in enterprise high-end router purchases, which really hurt the market, with enterprises accounting for less than a third of total revenue.

Cisco stayed the leader in Gigabit router sales, with 65.9 per cent of worldwide revenue, up 0.6 per cent from the previous quarter. Juniper was second, with 16.3 per cent, a drop of almost four percentage points from the third quarter of 2000. Riverstone Networks and Unisphere had something to do with Juniper’s slide, as the market newcomers garnered 6.2 per cent and 5.7 per cent of the market respectively.