Recession catches up with Ethernet switching market


Recession catches up with Ethernet switching market

Microscope contributor

The deepening economic downturn is catching up with sectors previously thought to be quite resilient, according to the latest report on the Ethernet switch market from analysts at Infonetics Research.

The Infonetics Q4 market survey showed a 2% decline in sales year-on-year, with a more alarming 7% decline over the third quarter of 2008, chiefly caused by slowing demand for application switch gear. This knocks back growth in the market to just 5% over the year, with global revenues hitting $18.2bn (£12.6bn).

Directing analyst Matthias Machowinski said: “The deterioration in worldwide economic activity is finally catching up with the Ethernet switch market after besting our forecast one last time in the third quarter.”

There were still some positive trends, as Machowinski continued: “While the short term outlook is not good, due to buyers pulling back on expenditures, we did see positives; for one, manufacturers were able to shift the sales mix to higher priced products. If this trend sustains it should help with profit margins in what is expected to be a tough year ahead.”

Infonetics also pointed to growth in 10G fixed Ethernet switches, and added that the number of 1G fixed power-over-Ethernet port shipments jumped over 55% in 2008.

Researchers identified 3Com/H3C as the segment market-leader, with Netgear and HP ProCurve also performing above expectations, while Cisco was blamed for much of the slowdown, with sales down 5.7% in Q4.

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