Wednesday, December 7, 2011

Infonetics: Cisco Rebounds in Ethernet Switching

Ethernet switch sales jumped 13% sequentially, to $5.0 billion globally in 3Q11, following a relatively weak performance in the first half of 2011 (1H11), according to a new report from Infonetics Research. Cisco performed exceptionally well, growing their overall Ethernet switch revenue 18% and capturing 68% of the global market. Meanwhile, 3Q11 enterprise router sales were up 5% quarter over quarter and up 3% year over year, at $888 million worldwide.

Some Ethernet switch highlights:

  • Ports have been growing all along as demand for networking products continues, but fierce competition cut into revenue growth in 1H11

  • 10G ports had the highest growth, up 21% quarter over quarter, and almost double the year-ago level, benefiting from data center upgrades,

  • 10G server adoption, server virtualization, and core network buildouts

  • The long-awaited 40G market finally emerged in 3Q11, with $6.5 million in global revenue

  • Ethernet switch average selling prices (ASPs) have declined over 20% the past year, but now vendors are holding the line on discounting

    Number-three player Juniper had a solid quarter, sequentially up 6% in revenue and 12% in ports, and still logging double-digit year-over-year growth

Some enterprise router highlights:

  • 3Q11 enterprise router sales are up 5% quarter over quarter and up 3% year over year, at $888 million worldwide

  • Branch and low-end routers had the best performance in 3Q11, with branch revenue up 9% sequentially and low-end up 23%

  • High-end routers have the highest year-over-year increases as buyers recover from underinvestment during the recession and invest to deal with rising network traffic

  • 3Q11 revenue growth was driven by Asia Pacific (primarily China), but also Central and Latin America, which jumped 44% sequentially due to strength in Brazil

  • Cisco still leads the enterprise router market by far, with 74.2% of 3Q11 revenue share, followed by HP and Juniper; year over year, Cisco has lost almost 5 points of market share, HP is up 3 points, and Juniper is up less than 1 point.