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Gartner: Ethernet switching shipments up, router market down

Tue, 11/26/2002 - 7:00pm
Duffy Hayes

New numbers from Gartner Dataquest show that while service providers weren't buying the number of routers that they were just a quarter ago, shipments of Ethernet switching gear to the enterprise market were up compared to a year earlier.

Gartner pegs revenue for the worldwide service provider router (SPR) market at $445 million for the third quarter of 2002, a full 10 percent decline from the second quarter of this year, the firm said.

Cisco Systems Inc. continued to dominate the SPR market with a 62.5 percent market share on revenues of more than $278 million. Cisco shipped more than double the number of units in the quarter than its closest competitor, Juniper Networks, according to the survey.

Specifically, Gartner analysts attributed the drop to a decrease in prices due to competition for ever-shrinking telecommunications spending budgets. That pressure is expected to continue in the SPR market into 2004, Gartner said.

The news was a bit brighter in the enterprise market for networking gear. Gartner also released a report detailing an increase in shipments for Ethernet switching products for the quarter just ended. These types of switches are being targeted today at the aggregation layer of midsize and large enterprises, and are quickly becoming the switch of choice when compared to the more expensive Layer 2 switches that have traditionally been put in place in company networks up to now.

While worldwide revenue from Ethernet totaled $2.9 billion in Q3 2002-just a 1.3 increase from the same time period a year earlier-the number of Ethernet port shipments showed much stronger growth, reaching 39.5 million units for the quarter. That was a jump of more than 21 percent, as compared to the third quarter of last year.

Cisco was king here as well, both in worldwide Ethernet switching vendor revenue and in the number of port shipments for the quarter. 3Com was a distant second in both of these categories, but it jumped into the number two spot on the revenue side after posting a distant fifth position last year.

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