The worldwide Ethernet switch market opposed resistance to the global economic downturn for a while, but it finally gave in : in the 4th quarter of 2008, the Ethernet switch market was down for the first time in several quarters, both sequentially (minus seven percent) and year-over-year (minus two percent), according to Infonetics Research’s latest Ethernet and Application switches market report.
The market had started strong early 2008. As a result, over the whole year, the worldwide Ethernet switch market still grew five percent from 2007 to reach $18.2 billion in 2008.
Contrary to the global trend, the North American market grew both quarter-over-quarter and year-over-year, although slightly slower than the global market, with a 2.6 percent annual increase.
Another positive finding: network equipment vendors shifted their sales mix to higher-priced products, which should benefit their profit margins.
A couple of market segments experienced high growth: in 2008, 10Gbps fixed Ethernet switches generated twice more revenue than in 2007, and vendors sold 56.4 percent more 1Gbps fixed Power-over-Ethernet ports.
The application switch market dropped by four percent to $272 million in the fourth quarter of 2008. This is a sign of more to come for this market, due to its high exposure to financial services, according to Infonetics Research.
Trends also varied among equipment vendors in the last quarter: Adtran and Alcatel-Lucent both posted significant revenue increases, while Cisco, with revenue down 5.7 percent, was to blame for much of the overall Ethernet switch market decrease.
Although most application switch vendors’ revenues were down during the last quarter, it wasn’t the case for Citrix and Radware.
By Annabelle Bouard