Monday, February 2, 2009

Dell'Oro Group Forecasts Steepest Ethernet Switch Market Decline Since 2001

The Ethernet Switch market is forecasted to decline almost 10 percent in 2009, the sharpest decline since 2001, according to a recent report by Dell'Oro Group. This recent decline will likely result from the slowing or contracting of the three pillars that drove the market to record levels in 2008, namely, emerging markets, wiring closet upgrades, and datacenter consolidation.

The report indicates that macroeconomic conditions will lead to a more modest year-over-year decline in 10/100 Mbps switches compared to the prior forecast, and a decrease in the adoption of 1000 Mbps. The report also indicates that significant new product introductions should help propel 10 Gigabit Ethernet growth as those products begin to ramp in 2009.

"Global macroeconomic conditions have worsened rapidly and many companies have gone from a position of expansion to one of caution and contraction," said Alan Weckel, Director of Dell'Oro Group. "We believe that over the short term, customers have shifted their purchasing patterns from a focus on getting more features and functionality for the same price or a small price premium, to one where they now focus on getting the same features and functionality at a lower cost," stated Weckel.

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