Sunday, March 1, 2009

Dell'Oro: Significant Drop Forecasted in Q1 Ethernet Switch Sales

The Ethernet Switch market experienced a mid-single digit revenue decline in the fourth quarter of 2008 and is forecasted to decline in excess of 10 percent in the first quarter of 2009, according to a new report from Dell'Oro Group. The market is poised to lose over $1 billion dollars in its quarterly run rate over the course of two quarters.

"Although this is the most significant first quarter forecasted decline in Ethernet Switch history, it is important to note that first quarter is typically seasonally weak," said Alan Weckel, Director at Dell'Oro Group. "Businesses are canceling or delaying projects and distributers are lowering inventory levels. In addition, deteriorating macroeconomic conditions have coincided with what is usually the market's weakest quarter of the year, exacerbating the decline in the first quarter of this year," Weckel added.

The report also indicates that 10 Gigabit Ethernet (GE) will be the only segment to show sequential port and revenue growth in 2009, as purpose-built fixed 10 GE boxes for the datacenter begin to contribute significantly to 10 GE growth in 2009.