SOURCE: Infonetics Research

November 30, 2006 15:17 ET

Enterprise switch sales up, router sales down in 3Q06

BOSTON, MA -- (MARKET WIRE) -- November 30, 2006 -- Worldwide Ethernet switch revenue jumped 13% to $4.2 billion between the second and third quarters of 2006, and port shipments increased 9% to reach 82 million, according to Infonetics Research's latest L2-L7 LAN Switches report. Worldwide Ethernet switch sales are forecast to grow 22% from 2005 to 2009, from $15.3 billion to $18.6 billion.

Meanwhile, the worldwide enterprise router market slipped 2% in the third quarter, dipping to $1.04 billion, but is expected to continue its slow and steady growth overall year-over-year, according to Infonetics' 3Q06 Enterprise Routers & WAN Optimization Appliances report.

The underlying demand for routers is strong, with unit shipments expected to pass the 3 million mark in 2009, but intense competition and price erosion are curbing revenue growth. Still, worldwide revenue is projected to total $4.8 billion in 2009, reflecting a 10% 5-year revenue compound annual growth rate.

"The enterprise router market was down this quarter, but not as much as expected, and the LAN switch market exceeded growth expectations for the quarter, which is good news for manufacturers in both markets. The bottom line: the network equipment market is alive and well," said Infonetics Research analyst Matthias Machowinski. "We also started ongoing coverage of the WAN optimization market this quarter, and while it is still an early and small segment, we're seeing decent growth in this area."

3Q06 Switch Highlights

--  Cisco has a comfortable lead in the layer 2 managed fixed
    configuration segment with more than half of worldwide port share, but in
    the layer 3 segment, the competition is close: ProCurve is 4 points behind
    Cisco's 25% port share
--  NETGEAR is first in port shipments and second in revenue for unmanaged
    fixed configuration switches, and D-Link is first for revenue, second for
--  Ethernet switch port shipments increased across the board in 3Q06,
    with the strongest growth coming from 1G, 10G, and PoE (up 16%, 21%, and
    20%, respectively)
--  Worldwide application switch sales jumped 18% to $239 million in 3Q06
    (up 32% year-over-year)
3Q06 Router Highlights
--  Cisco continues to lead the total enterprise router market by far,
    with more than 3/4 of worldwide revenue share, led by strong high-end
    router sales; Huawei is 2nd, Juniper 3rd
--  49% of enterprise router revenue was from high-end routers, 46% from
    mid-range, and 5% from low-end
--  WAN optimization appliance shipments increased 14% between 2Q06 and
    3Q06, totaling almost 12,000
--  43% of enterprise router sales came from North America, 33% from EMEA,
    19% from Asia Pacific, 5% from CALA
Infonetics' L2-L7 LAN Switches report tracks Ethernet switches, broken out by managed (with an additional layer 2 vs. layer 3 split) and unmanaged fixed configuration, chassis, and application switches. Forecasts are updated quarterly. Companies tracked include 3Com, Alcatel, Allied Telesis, Cisco, Citrix, D-Link, Enterasys, Extreme, F5, Foundry, Linksys, NETGEAR, Nortel, ProCurve, Radware, SMC, and others.

The Enterprise Routers & WAN Optimization Appliances report tracks high-end, mid-range, and low-end routers, and WAN optimization appliances. Forecasts and market share are updated quarterly and cover all regions (worldwide, North America, EMEA, Asia Pacific, and CALA). Companies tracked include 3Com, ADTRAN, Allied Telesis, Cisco, Enterasys, Expand, Huawei, Juniper, Nortel, Packeteer, Riverbed, Siemens, Vanguard, and others.

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Infonetics Research ( is the premier international market research and consulting firm specializing in data networking and telecom. Services include quarterly market share and forecasting, end-user survey research, service provider survey research, and service provider capex analysis.

Contact Information

  • Press Contact:
    Matthias Machowinski
    Directing Analyst, Enterprise Voice & Data
    Infonetics Research
    Email Contact