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IDC: EMEA Firms Lap Up GigE

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AMSTERDAM -- Second-quarter results from IDC's EMEA LAN Switch Tracker show that Gigabit Ethernet port shipments continued to increase in importance but the growth rate was lower than in 1Q04.

Gigabit Ethernet shipments increased 4.6% and revenue declined 1.5% in 2Q04 over 1Q04, amid strong price competition. The overall LAN switch market in EMEA declined by 0.6% to 16.4 million ports in 2Q04, compared with 16.5 million in 1Q04, and revenues decreased 3.3% to $1.2 billion in 2Q04. This is in sharp contrast with 1Q04, when EMEA LAN switch port shipments increased 15% and revenues 21.7%.

Gigabit Ethernet LAN switches accounted for 14.4% of all LAN switch ports shipped and 53.5% of all LAN switch revenues in EMEA in 2Q04, compared with 13.7% and 52.5% in 1Q04.

Most vendors were able to grow their Gigabit Ethernet revenues, with many seeing double-digit growth. However, vendors such as D-Link, Accton/SMC, and Linksys fueled the overall decline in average selling price and revenue because of strong price competition.

The decline in the market was also fueled by a number of vendors shipping large quantities of LAN switches - especially Gigabit Ethernet - to their distributors in 1Q04. As distributors still had high inventory levels at the end of 1Q04, they placed fewer orders in 2Q04.

The largest vendor measured in revenue in 2Q04 was Cisco, followed by HP, 3Com, Nortel, and Extreme.

"Gigabit Ethernet will continue to drive growth in the EMEA LAN switch market in the coming quarters, as enterprises increasingly are using Gigabit Ethernet LAN switches for desktop connectivity and to interconnect servers in datacenters," said Peter Hulleman, senior research analyst with IDC's European Telecommunications and Networking group. IDC's EMEA LAN Switch Tracker contains detailed information on quarterly shipments and revenues segmented by vendor, six technologies, OSI layers (2/3/4-7), and three form factors for 23 countries in the EMEA region.

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