Router, Switch Market Topped $19 Billion In 2005: Report

The enterprise networking hardware market enjoyed a healthy 2005, with substantial growth likely to continue through 2009, according to a new report from Infonetics Research.

Revenues from sales of layer 2-3 switches reached $15.3 billion last year, up 9% over 2004, representing 273 million ports shipped, while layer 4-7 revenues jumped 26% in the same period to reach $750 million. According to Infonetics, revenues from sales of Ethernet switches as a whole will grow 27% by 2009, to exceed $20.3 billion, while port shipments will rise even more quickly, due to a steady decline in prices.

Price pressures caused an overall 3% dip in revenues from sales of enterprise routers last year, which amounted to $3.3 billion, compared to $3.4 billion in 2004. However, router demand remains high, and despite the slight revenue drop, unit shipments grew 14% in 2005.

"As organizations continued to build out and upgrade their aging infrastructure, they spent more than $19 billion on enterprise routers and switches last year," Infonetics directing analyst Matthias Machowinski said in a statement. "Overall, the market for enterprise networking gear remains healthy, with Ethernet switches doing particularly well."

The networking hardware market also had a healthy last quarter of 2005, with Worldwide level 2-3 switch revenues rising 4% to $4.1 billion, and ports increasing 7%. Level 4-7 switch revenues rose even more dramatically in the fourth quarter of 2005, jumping 19% to $215 million. Unit shipments were up 14% to almost 13,000. Secure router shipments tripled in the same period, while revenues soared 121% to $803 million