Sales of Ethernet switches decreased 4% sequentially in the first quarter of 2008, but are up 9% year-over-year from the first quarter of 2007, indicating a healthy overall switch market, reveals a new report from communications market research firm Infonectics Research. The first and fourth quarters are typically down quarters for the Ethernet switch market. 

Sales of Ethernet switches decreased 4% sequentially in the first quarter of 2008, but are up 9% year-over-year from the first quarter of 2007, indicating a healthy overall switch market, reveals a new report from communications market research firm Infonectics Research. The first and fourth quarters are typically down quarters for the Ethernet switch market.

The worldwide Ethernet switch market totaled $4.3 billion in 1Q08, and worldwide revenue is expected to post slow, incremental growth each year through at least 2011, say analysts.

"Fears of economic uncertainty impacting the switch market aren't panning out so far; while some vendors posted dismal sequential results, much was attributable to seasonality, and other vendors picked up whatever slack was left," explains Matthias Machowinskim directing analyst for enterprise data. "At this point, we don't have any solid evidence-based reasons to reduce our outlook for this market," he contends.

Other highlights from the report include the following:
• Most segments of the Ethernet and application switch market in 1Q08 were flat to down, although most are up on a year-over-year basis;
• Two emerging segments bucked the downward trend and posted strong double-digit growth in 1Q08: fixed managed layer 10-Gigabit Ethernet ports and 1-Gigabit Ethernet unmanaged ports;
• Another bright spot in the Ethernet and application switch market in 1Q08 was a general rise in average selling prices (ASPs) for most categories and port speeds;
• Cisco's Ethernet switch revenue was down 1% sequentially in 1Q08, but this was a good performance considering many leading competitors had double-digit decreases; and
• Worldwide application switch revenue declined 7% in 1Q08 from 4Q07, in line with expectations; year-over-year, revenue is up 18%.
  

Infonetics Research