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F&S Reports on 10-Gig Testing

Convergence key to driving deployment of Gigabit Ethernet technology, signifying huge potential for test equipment, says Frost & Sullivan

December 15, 2005

2 Min Read

PALO ALTO, Calif. -- The 10 Gigabit Ethernet test equipment market revenue is increasing due to the early stages of development of the market. Deployment in the field started in 2004 and will continue in the future.

New analysis from Frost & Sullivan (http://www.testandmeasurement.frost.com ), World Gigabit Ethernet (GbE) & 10 Gigabit Ethernet (GbE) Test Equipment Markets, reveals that the market earned revenue of $233.3 million in 2004 and projects to reach $626.9 million in 2011.

"However, research indicated that prices for both GbE and 10GbE test equipment would lower significantly over time, which may lower the business opportunity," says Frost & Sullivan Program Manager Jessy Cavazos. "As network equipment manufacturers lower their prices, so do test equipment vendors."

There is also aggressive competition between the leaders in the world GbE and 10GbE test equipment space. As a market matures, price erosion occurs naturally. However, in this market space, it is compounded by this aggressive competition between leaders. Actual prices paid by customers can be significantly lower than list prices. The actual prices may in fact be reduced by as much as 50 to 60 percent depending on the client and the location of this client.

Also, research indicated the emergence of competition from smaller companies from Asia. Typically, such companies sell to network equipment manufacturers in countries such as Japan, China and Taiwan. These companies tend to penetrate the market by offering lower-priced test equipment that has a reduced feature set.

"The good news is that the decline in prices is balanced out by the growing volume of the demand," says Cavazos. "This is how network equipment manufacturers are able to pressure test vendors to lower prices."

Frost & Sullivan

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