Networking market set for $50 billion by year-end

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The worldwide networking equipment market grew to $11.8 billion in Q2 2000, a healthy eight percent increase from Q1, according to Cahners In-Stat Group. The high-tech market research firm expects year-end total revenues to hit almost $50 billion.

“Growth quickened in Q2, due to strong enterprise backbone purchases, continued service provider network build-out, and growth in the demand for branch office and Soho networking equipment,” said Gemma Paulo, research analyst for In-Stat’s voice and data service. “Growth in Q2 also appeared quite healthy due to the typical seasonal sluggishness experienced in Q1. Some of the top players in the networking equipment market, including 3Com and Lucent, experienced market share declines as they continued to deal with reorganizational issues.”

The researchers also found that:
• Quarter to quarter growth was driven primarily by WAN equipment, i.e. digital modems, access concentrators and routers. DSL and cable modem revenues combined, increased 30%, and additional growth is expected as obstacles to deployment are increasingly overcome. The router market’s greater-than-expected growth was driven by the tremendous demand for branch office and Soho routers. Furthermore, the continued growth in ATM switches was driven by the rapid deployment of broadband services, VoIP and network convergence.
• North America continued to dominate network hardware sales, accounting for 54% of the market in Q2. However, Asia is building out service provider infrastructure at an unparalleled pace, and jumped two percentage points in revenue share, to 15%, in Q2.
• Cisco maintained its number one market share ranking, followed by Nortel, 3Com and Lucent. While Cisco grew its revenue share, all three of its closest competitors experienced declines in their market shares for Q2.

The report, ‘Q2 00 State of the Networking Equipment Market’, is part of In-Stat’s quarterly networking market review service. This provides an assessment of how networking segments interact on a quarterly basis.

In-Stat Group

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