IDC Releases LAN Equipment Market Results

September 1, 2000

NEWS BRIEFS

Framingham, MASS. — The worldwide router market had a strong revival during 2Q00. Worldwide revenues grew more than 17% quarter to quarter. This information comes from IDC’s Worldwide LAN QView service, providing accurate, up-to-date insight into purchasing decisions, supplier performance, and technology trends in the LAN equipment markets.

“There has been a reversal of fortunes in the router and LAN switch markets this quarter. Routers are way up in revenues, propelled by high-end sales to service providers. Switches show strong growth in shipments, but have only a slight recovery in revenues – due mainly to sharp price declines,” said Paul Strauss, senior analyst for Enterprise Networks research at IDC. Major LAN equipment trends in the second quarter shown by IDC’s QView service include:

— Key to the router recovery have been sales of high-end routers, those that cost more than $20,000 a unit. High-end router sales surged more than 25% in the second quarter and now account for slightly more than half of the $2.97 billion in worldwide quarterly router revenues. By far the bulk of these sales go to service providers, who have been eagerly buying gigabit routers, worth more than $583 million in the quarter.

— There has been strong shipment growth in the LAN switch market, up 11% in the quarter, but revenues have been constrained by sharp price declines, with average prices of 10/100 ports down 19% in the quarter. Hence, LAN switch revenues were up only 2.9%, after a 5.8% decline in the first quarter.

— Buyers are rapidly turning to Layer 3 LAN switches, which for the first time had more than $1 billion in quarterly revenues and now account for 27% of total LAN switch revenues, excluding ATM. Layer 3 LAN port shipments are up 71% from the same quarter a year ago.

— IDC’s LAN QView has begun tracking intelligent content switches, also known as Layer 4-7 switches, which had $138 million in revenues in the second quarter. Leading in the sector is Cisco, which has 47% of the sector’s revenues through recently acquired ArrowPoint, followed by Nortel Network’s new acquisition, Alteon Web Systems, with 27%, Extreme Networks with 16%, and Foundry Networks with 9%.

IDC’s LAN QView service is a powerful tool for determining market changes in the fast-growing LAN equipment marketplace. The service now includes regular figures on shipments and revenues in the intelligent content switch (Layer 4- 7) marketplace. On the router side, LAN QView now includes a regular breakout on router shipments to service providers. Supported by a team of IDC LAN market analysts located around the world, IDC’s Worldwide LAN QView was launched in response to customer demand for timely, detailed, and accurate LAN equipment market results.

IDC’s Worldwide LAN QView data is segmented by technology, form factor, function, region, price band, and customer, where applicable; delivered eight weeks after the close of a calendar quarter; and made available to clients in an easy-to-review electronic format. Electronic market reports detailing IDC’s Worldwide LAN QView results for the LAN switch, router, and hub markets are available for purchase now.

IDC delivers dependable, high-impact insights and advice on the future of ebusiness, the Internet, and technology to help organizations make sound business decisions. IDC provides global research with local content through more than 600 analysts in 43 countries worldwide. IDC’s customers comprise the world’s leading IT suppliers, IT organizations, ebusiness companies, and the financial community. Additional information can be found at http://www.idc.com .

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