Ethernet Switch Market Stabilising; Router Market Grows

The worldwide Ethernet switch market experienced a year-over-year decline of 1.6% in the second quarter of 2011 (2Q11), while the worldwide Router market continued with its trajectory of continued growth with a 14.5% year over year increase, according to the International Data Corporation (IDC) Worldwide Quarterly Enterprise Networks Tracker. The preliminary results show the ethernet switch market moderating after an exceptional recovery in the previous year, while the router market continued to grow especially in North America.

“There were no major surprises in the second quarter of 2011 in the Ethernet switch market as a follow on to the significant decline we saw in the first quarter and after a strong 2010,” said Rohit Mehra, director, Enterprise Communications Infrastructure at IDC. “We expected growth to moderate going into 2011, and what we have seen so far in the ethernet switch market is slightly weaker than expected performance even with the 7.1% sequential growth in the second quarter. While average per port prices have been under pressure, they seem to stabilising, and barring a significant macroeconomic downturn, IDC expects low to moderate growth in the remainder of 2011.”

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10GbE switch revenue increased 22.6% year over year due to continued adoption in datacentres and campus core deployments. 10GbE port shipments grew to 1.43 million ports in the quarter, although per port prices declined by more than 10% again, even after the previous quarter’s decline.
The worldwide router market came out stronger than expected in 2Q11 with 14.5% year-over-year growth, and the sequential 7.6% growth over the first quarter was equally impressive. Most of this growth came from North America, specifically the U.S. where the market increased nearly 42% year over year, while EMEA and Latin America declined. The service provider segment, which accounted for 76.5% of the market in 2Q11, grew 9.0% quarter-over-quarter, while the enterprise segment grew a moderate 3.1% over the previous quarter.

From a vendor perspective, Cisco’s Ethernet switch (Layer 2/3) market share in 2Q11 came in at 63.4% reflecting a slight decline, down from 64.1% in 1Q11. Cisco’s market share is now at levels seen in 2009 when it averaged 64.4%. On a relative basis, Cisco continues to be strong in the 10GbE segment with a 73.2% market share in 2Q11.

“In the broader Ethernet switching market, Gigabit Ethernet (GbE) decreased 5.5% year-over-year in spite of a 14.2% increase in port shipments,” said Petr Jirovsky, senior research analyst in IDC’s Enterprise Communications Infrastructure Group. “Gigabit Ethernet now commands a 60.4 % share of the overall Layer 2/3 switching market, while Fast Ethernet continues its slow decline with a 11.11% share.”

The IDC Worldwide Quarterly Enterprise Networks Tracker service delivers an Ethernet switch and router market pivot tables seven weeks after the close of the calendar quarter. The Ethernet switch coverage includes manufacturer revenue and port shipments by vendor, layer, speed, form factor, power over Ethernet (PoE) capabilities, and average pricing. The router coverage shows manufacturing revenue and unit shipments by vendor, product class, deployment, connectivity, and average pricing.