Sales Increase In Ethernet Switch, Router Markets

Revenues for the Ethernet switch and router markets increased by 16 percent and 5 percent, respectively, in the first quarter, a market research firm said Thursday.

The Ethernet switch market reached $3.2 billion, due, in part, to shipments and revenues being delayed from the fourth quarter of 2003, the Dell'Oro Group said. The revenue jump in comparison to the previous quarter was unusual, because the first quarter is typically the weakest quarter of the year.

All major market segments reported revenue increases, but the Gigabit Ethernet market was particularly strong, with revenues exceeding Fast Ethernet (100 Mbps) for the first time, Dell'Oro analyst Seamus Crehan said.

"Most of this growth was driven by recently-introduced, high-density gigabit-over-copper switches and line cards targeted for server and desktop connectivity," Crehan said in a statement.

The top five vendors, in order, and their market performance were Cisco, up 25 percent in sequential revenues; Nortel Networks, down 9 percent; Hewlett-Packard, up 7 percent; 3Com, flat; and Foundry, down 9 percent.In a separate report, router sales worldwide increased to $1.8 billion, Dell'Oro said.

Low-end and midrange routers, typically used by businesses for remote sites or branch offices, experienced the strongest growth at 9 percent over the fourth quarter.

"This was the best quarter-over-quarter growth in more than three years, and may be an early indication that businesses are finally loosening the purse strings to expand and upgrade their router-based networks," Dell'Oro analyst Shin Umeda said.

Sales of high-end routers typically used by telecommunications services providers to manage and carry Internet traffic grew by 7 percent, continuing a trend that began in the second half of last year.

The top four vendors, in order, and their market performance were Cisco, up 6 percent in revenues; Juniper Networks, up 8 percent; Redback Networks, up 12 percent; and Nortel, down 38 percent.0