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    Ethernet Switch Revenue Hits $21 Billion: IDC

    By
    Fahmida Y. Rashid
    -
    February 22, 2012
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      Worldwide Ethernet switch revenues reached $21 billion in 2011, with most of the growth coming from Latin America; Europe, the Middle East and Africa; and the Asia-Pacific region, according to a new report from IDC.

      The worldwide Ethernet switch market rose to $6.06 billion in the fourth quarter of 2011, up 5.5 percent year-over-year and up 1.2 percent over the third quarter of 2011, according to the Feb. 22 report.

      Emerging markets played a significant role in spurring growth in the fourth quarter of 2011. Even though the preliminary results showed a slight decline in Ethernet switch sales in North America, there was strong market growth in Latin America; Europe, the Middle East and Africa; and in the Asia-Pacific region, IDC found. Latin America posted the biggest growth, with 29 percent, compared with 8.4 percent in the Asia-Pacific region.

      “The market recovery in the second half of 2011 is very encouraging for the enterprise networking market, with most market segments and regions making a contribution,” said Rohit Mehra, director of enterprise communications infrastructure at IDC.

      Despite the strong growth in the fourth quarter, the worldwide Ethernet Layer 2/3 switch market for the full year 2011 was essentially flat, compared with 2010, with revenues of $21.1 billion. Various product segments saw some growth, such as the 5.7 percent gain in the full year 2011 for the worldwide router market. Market revenues for 10 Gigabit Ethernet grew 26.5 percent in the full year, compared with 2010.

      Fourth-quarter market growth was driven by demand for 10 Gigabit Ethernet. Revenues for 10 Gigabit Ethernet Layer 2/3 switches increased almost 33 percent in the fourth quarter of 2011 year-over-year, and rose 5.1 percent from the third quarter of 2011. In addition, 10 Gigabit Ethernet port shipments grew to a record 2.8 million ports in the fourth quarter compared with the previous year.

      The stronger market performance helped the overall Ethernet switch market finish the year on a positive note, said Petr Jirovský, a senior research analyst in IDC’s networking trackers group. “That bodes well for the market in general,” he said.

      Cisco Systems continued to dominate the 10 Gigabit Ethernet segment with 69.5 percent market share in the fourth quarter.

      Cisco’s overall Ethernet switch market share was 64.3 percent in the fourth quarter, a slight drop from the previous year’s 66.2 percent, but a “significant improvement” from earlier in the year, according to IDC.

      Despite the overall growth in the worldwide router market, fourth-quarter performance was not as positive. Router market revenues increased 7.3 percent in fourth quarter, compared with the prior quarter, but were down 2.3 percent year-over-year, according to IDC. Latin America also drove growth in this product segment, with a 16.6 percent increase. The expansion in Latin America and the Asia-Pacific region offset declines in other geographic regions.

      Even so, this was a “solid performance,” considering the exceptionally strong market growth in 2010, the IDC report found.

      The Ethernet switch market is expected to show moderate growth in 2012, according to Mehra. Demand drivers include 10 Gigabit Ethernet and 40 Gigabit Ethernet deployments in data centers and campus core infrastructure, he added.

      Fahmida Y. Rashid

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