Weak Ethernet

As enterprises remain cautious with their IT budgets, the Ethernet switch market continues to struggle, according to a new report from Gartner.

As enterprises remain cautious with their IT budgets, the Ethernet switch market continues to struggle.

Worldwide Ethernet switch port shipments totalled 37.4 million units in the second quarter of 2003, a 2.6% decline from the second quarter of 2002, according to preliminary results by US research firm Gartner.

Worldwide Ethernet switch vendor revenue declined 15% from a year ago, to $2.3 billion.

‘Despite new features such as enhanced security and Power over Ethernet, vendors that play in the enterprise market are facing challenges in selling upgrades to their installed bases,’ said Rachna Ahlawat, principal analyst for Gartner’s Enterprise Networking and Communications Worldwide group.

‘The lack of adoption of Gigabit Ethernet to the desktop, despite significant price reductions, indicates that increased speed will not lead the market out of its doldrums.’

Cisco Systems continued to dominate the market in the second quarter of 2003, claiming 70.6% of world-wide Ethernet switching revenue and 37.7% of port shipments. Hewlett-Packard was the only top-tier vendor to post positive growth in both revenue and port shipments.

The consumer and government segments were key growth areas in the second quarter of 2003. Small Office/Home Office (SOHO) switch sales remained strong, evident by an increase in port shipments by D-Link and Netgear. Gartner analysts said highly competitive pricing appears to be driving demand of low-end switches.