Enterprise Networking Equipment Markets Down In 1Q11

Market research firm Infonetics Research today released excerpts from 3 first quarter 2011 (1Q11) enterprise networking market share reports: Ethernet Switches, Wireless LAN Equipment and WiFi Phonesand Enterprise Routers.

“Enterprise network equipment sales fell across the board in the first quarter of 2011, partially due to seasonality, partially due to hiccups in the economic recovery as public sector spending dries up,” reports Matthias Machowinski, Infonetics Research’s directing analyst for enterprise networks and video. “But not all segments are faring equally: wireless LAN equipment is proving resilient, with global revenue up 17% from this time last year. Enterprises and SMBs are building out their wireless infrastructure to lay the foundation for a new generation of devices, particularly tablets, which can only connect wirelessly to the network.”

Ethernet Switch Market Highlights

• After a growth streak throughout 2010 that propelled the enterprise Ethernet switching market to record levels, worldwide revenue was down 12% sequentially to $4.2 billion in 1Q11, and 9% lower year-over-year (from 1Q10)

• Weakness in the public sector vertical due to sun-setting stimulus programs and pressure on government budgets contributed to the decline, and will be a drag on market growth for the rest of the year

• Almost every vendor posted negative revenue results in 1Q11 compared with 4Q10, with #1 Cisco down 14%, #2 HP down 3%, and #3 Juniper down 23%

• Only 3 vendors – Avaya, Force10, and Adtran – bucked the downward trend, each posting global Ethernet switch revenue gains ranging from 1.5% (Avaya) to 24% (Adtran)

Wireless LAN Market Highlights

• After a record fourth quarter in 2010, worldwide WLAN equipment revenue decreased 8% in 1Q11, to $698 million, due to ASP pressure, a seasonal decline in APAC, and slowing public sector sales

• Global WLAN equipment revenue is up a healthy 17% year-over-year (1Q10 to 1Q11), continuing a trend of strong double-digit YoY growth for 6 quarters in a row

• In 4Q10, 802.11n access points APs outnumbered legacy a/b/g APs for the first time, and the march toward 802.11n continues: in 1Q11, 11n APs were up 4% sequentially, while legacy APs declined 9%

Enterprise Router Market Highlights

• Worldwide enterprise router sales totaled $797 million in 1Q11, down 14% sequentially and down 3% from a year ago in 1Q10, marked by declining mid-range router sales and strong low-end sales

• All major world regions saw sequential declines in enterprise router sales in 1Q11, and only Asia Pacific and Central and Latin America posted increases year-over-year (from 1Q10), lifted by the financial sector, and, counter to the worldwide trend, the public sector

• Cisco is the biggest enterprise router vendor by far (77% of revenue)

• HP moved into second place for the first time (6% revenue share), lifted by their exposure to the Chinese market