Ethernet Switch Market Slides
Global enterprise switch market hit by a year-over-year revenue decline as WLAN revenues grow.
The global networking market is in a period of transition, with vendors big and small being impacted.
Infonetics Research this week released its second quarter 2011 Ethernet Switches and Enterprise Routers market share reports, painting a mixed picture of both market growth and decline.
On a quarterly basis, Infonetics reported that Ethernet switch sales hit $4.4 billion in the second quarter of 2011. That figure represents a 3 percent decline on a year-over-year basis, though it is a 6 percent gain over the first quarter of 2011.
While switch revenues paint a mixed picture, demand for Ethernet ports continues to grow.
According to Infonetics, second quarter 2011 port shipments grew by 11 percent on a year-over-year basis and 6 percent on a quarterly basis.
A key driver for Ethernet port growth is coming for the 10 Gigabit which grew 58 percent year-over-year, according to Infonetics. At the end of August, IDC published its data on enterprise networks reporting that 10 gigabit switch revenues increased 22.6 percent year over-year.
Infonetics also noted that Cisco's share for the second quarter of 2011 was down by 3 points, while HP is up by 2 points. Cisco continues to dominate the market however. In IDC's report, Cisco held a 63.4 percent market share for the Ethernet switch market in the second quarter of 2011.
"Ethernet switch buyers are in the driver's seat right now, as vendors are fiercely competing for their business," Matthias Machowinski, directing analyst for enterprise networks and video at Infonetics Research said in a statement. "While the battle is mostly playing out between Cisco and HP, other vendors are caught in the crossfire, with declining ASPs being one side effect. In the switch market, we expect this to result in stagnating revenue despite robust demand in 2011."
In contrast the market for global Wireless LAN (WLAN) equipment continues to grow revenues both sequentially and on a year-over-year basis. Infonetics reported that second quarter WLAN revenues hit $813 million which is a 35 percent year-over-year increase.
In terms of WLAN market leaders, Cisco holds the top spot followed by Aruba networks.
"Enterprises are building out their wireless infrastructure to deal with the surge in wireless devices (smartphones, tablets, etc.) swamping their networks," Machowinski said. "As a result, wireless LAN is the hottest market in the enterprise networking space today, with revenue being pushed to new highs. Meanwhile, the traditional wired segments will continue to see subdued growth."