L2–L3 Ethernet Switch Market Totals $3.3B in 1Q05; L4–L7 LAN Switch Market Up 5%

Worldwide

Infonetics Research: Worldwide L2–L3 Ethernet switch revenue totaled $3.3 billion in 1Q05, down 7% from 4Q04, and ports decreased 7% to 57 million Growth will pick up over the next four quarters, with ports increasing 14% and revenue 8% by 1Q06. Worldwide revenue is expected to reach $15.9 billion by 2008. Worldwide L4–L7 switch/load balancer shipments are up 10% to 11,000 between 4Q04 and 1Q05, and revenue is up 5% to $175 million, driven by sales of chassis-based devices. While quarterly growth is expected to slow and remain flat through 1Q06 in the overall L4–L7 product market, as there are no compelling applications driving significant increases right now, SSL-enabled devices will continue to sell well.

Cisco continues to lead the worldwide Layer 2–3 fixed configuration switch market, both in revenue and port share, but a race for second-place is playing out for port market share, with NETGEAR leading, D-Link not far behind, and 3Com holding steady. Most port speeds showed declines in the first quarter, 10/100M and 10G most significantly. Gigabit and PoE port shipments did increase a bit, but revenue was down due to ASP pressure. The vast majority of ports continue to be 10/100M, but 1G has been making great inroads, accounting for 18% in 1Q05, while 10G remains insignificant.”

1Q05 Market Highlights

• Cisco maintains its lead in the L2–3 Ethernet switch market, with about two-thirds of worldwide revenue share and close to a third of worldwide port market share; Cisco also leads the L4–L7 switch/load balancer market in worldwide port and revenue share

• ProCurve (HP) remains in second place for L2–3 Ethernet switch market revenue market share, and is sixth for port share

• F5 is now solidly in second place in the overall L4–L7 switch/load balancer market, passing Nortel in 4Q04, with over a quarter of worldwide revenue share, and maintains its strong lead in the L4–L7 switch/load balancer with SSL market, with the main competition coming from Cisco and Nortel

• Foundry had a positive quarter in the L4–L7 switch/load balancer market, significantly increasing unit and revenue share

• Fixed switches represent 48% of total L2–L3 switch revenue (up from 4Q04) and chassis switches represent 52%; this has changed from 40% fixed configuration and 60% chassis switch revenue in 2003

Quarterly market share and forecast service, L2–L7 LAN Switches. Publ 20050525 Ethernet switch switch?