February 24, 2009 14:58 ET

Infonetics Research: A few surprises in the Ethernet switch market in 4Q08

CAMPBELL, CA--(Marketwire - February 24, 2009) - Communications market research firm Infonetics Research released the fourth quarter (4Q08) edition of its Ethernet and Application Switches report yesterday. Highlights from the market research report follow.

ANALYST NOTE

"The deterioration in worldwide economic activity is finally catching up with the Ethernet switch market: after besting our forecast one last time in the third quarter, the market is down sequentially in the fourth, and also down year-over-year for the first time in several quarters. While the short term outlook is not good, due to buyers pulling back on expenditures, we did see a couple of positives this quarter. For one, manufacturers were able to shift the sales mix to higher priced products. If this trend sustains, it should help with profit margins in what is expected to be tough year ahead. And secondly, the North American market was actually up both sequentially and year-over-year, somewhat surprising given that this region is generally blamed for the current worldwide economic woes."

Matthias Machowinski, Directing Analyst, Enterprise Voice and Data, Infonetics Research

MARKET RESEARCH REPORT HIGHLIGHTS

--  The worldwide Ethernet switch market grew 5% to $18.2 billion in 2008
    from 2007
--  Starting off strong in early 2008 but decelerating in the latter half,
    the Ethernet switch market is:
    --  Down 7% 3Q08 to 4Q08
    --  Down 2% 4Q07 to 4Q08
--  A few bright spots in the Ethernet switch market:
    --  The North American Ethernet switch market is up 2.6% in 2008 over
        2007, and up 1.4% quarter-over-quarter in 4Q08
    --  Worldwide revenue for 10G fixed Ethernet switches doubled in 2008
    --  The number of 1G fixed PoE (power over Ethernet) ports sold jumped
        56.4% in 2008
--  Winners this quarter include Adtran and Alcatel-Lucent, both posting
    strong revenue increases, and Nortel and Extreme, both showing good
    performance given the difficult economic climate
--  Cisco accounted for much of the overall Ethernet switch market
    decrease year-over-year, but for the quarter, their revenue is up 5%
--  In the newly tracked web-managed Ethernet switch segment, 3Com/H3C is
    the worldwide market share leader, followed by NETGEAR and ProCurve
--  The application switch market dropped 4% to $272 million in 4Q08, a
    sign of more to come for this market due to the high exposure to
    financial services
--  Most application switch vendors had a down quarter, with two
    exceptions: Citrix and Radware

REPORT SYNOPSIS

Infonetics' switch report tracks 3Com/H3C, Adtran, Alcatel-Lucent, Blade, Cisco, Citrix Netscaler, D-Link, Extreme, F5, Force10, Foundry, Huawei, Linksys, NETGEAR, Nortel, ProCurve, Radware, SMC, and others. The report features flexible pivot tables and provides market size, market share, forecasts, and analysis for application switches, PoE switches by form factor and speed, and Ethernet switches (including chassis switches and layer 2 and layer 3 managed, unmanaged, and web-managed fixed configuration switches).

DOWNLOAD OR BUY THIS REPORT

To download this report if your organization has purchased it, or to download sample data from the report, log on to Infonetics' portal from www.infonetics.com.

For sales, please contact Larry Howard, vice president, at larry@infonetics.com or +1 (408) 583-3335.

Infonetics Research (www.infonetics.com) is an international market research and consulting firm serving the communications industry since 1990. A leader in defining and tracking emerging and established technologies in all world regions, Infonetics helps clients plan, strategize, and compete more effectively.