GartnerGroup's Dataquest Says LAN Switch Market Growth Continues to Outpace the Networking Equipment Industry
08:00 a.m. Aug 20, 1998 ET
Dataquest's Second Quarter Results Show LAN Switches Revenue
Surpasses Routers and Shared Media Hubs
SAN JOSE, Calif.--(BUSINESS WIRE)--Aug. 20, 1998-- The worldwide
networking equipment industry was driven by the LAN switch market in the second quarter of 1998, as revenue surpassed $2.1 billion, an increase of 78 percent over the second quarter of 1997, according to preliminary statistics from Dataquest Inc., a unit of Gartner Group Inc. (NASDAQ:GART).
LAN switches, routers, and shared media hubs, reached $4.1 billion, up 27.8 percent from the second quarter of 1997.
"The switch market has been driven by the demand for more efficient
use of bandwidth," said John Armstrong, director and principal analyst
for Dataquest's Networking Worldwide program. "As an early entrant
into the market, Cisco Systems has benefited the most from the rapid
adoption of this technology."
Cisco continued to lead the LAN switch market, which grew 168 percent
in the second quarter, and Cisco's own share of this market surpassed
40 percent (see Table 1). All segments of the LAN switch market did
well, especially the Fast Ethernet segment, which surpassed the $1
billion revenue mark during the quarter.
Table 1
Preliminary Worldwide LAN Switches Revenue Estimates for Second
Quarter 1998 (Millions of U.S. Dollars)
Q2/98 Q2/98 Market Q2/97 Q2/97 Market Growth
Company Revenue Share (%) Revenue Share (%) (%)
Cisco 857 40.6 320 27.0 167.7
3Com 323 15.3 247 20.8 31.2
Bay Networks 238 11.3 145 12.2 63.8
Cabletron Systems 188 8.9 198 16.7 -4.6
Others 503 23.9 277 23.3 81.6
Total 2,109 100.0 1,187 100.0 77.6
Source: Dataquest (August 1998)
Cisco was the only top-tier vendor in the router market to increase its market share in the second quarter of 1998 (see Table 2). Dataquest analysts said all segments in the router industry did well. "The midrange and high-end router market segments experienced growth, providing evidence that enterprise networking business remains a strong growth engine in the router market," said Armstrong.
Table 2
Preliminary Worldwide Router Revenue Estimates for Second Quarter 1998 (Millions of U.S. Dollars)
Q2/98 Q2/98 Market Q2/97 Q2/97 Market Growth
Company Revenue Share (%) Revenue Share (%) (%)
Cisco 1,007 71.4 793 69.3 27.0
Bay Networks 152 10.8 127 11.1 19.3
IBM 35 2.5 35 3.1 0.4
3Com 31 2.2 32 2.8 -4.4
Others 186 13.2 158 13.8 17.7
Total 1,411 100.0 1,145 100.0 23.2
Note: Total percentages may not add to 100 percent due to rounding. Source: Dataquest (August 1998)
The worldwide shared media hubs market suffered from continued price erosion. Shared media hub shipments increased 13.8 percent, but revenue declined 33.5 percent. While the top-tier vendors all suffered a decline in revenue, 3Com continued to hold the No. 1 position with 23.5 percent market share. Bay Networks was the No. 2 vendor with 21.3 percent market share, followed by Cabletron Systems, which posted 16.1 percent market share.
Additional market statistics are available in the Dataquest Alert
titled "Router, LAN Switch, and Shared Media Hub Market Performance
for Second Quarter 1998." This report provides preliminary market
statistics including market size by product category, market share
for major segments.
This report is produced by Dataquest's Networking Worldwide program. This program focuses on the developing LAN and WAN technologies and products that are driving the growth of the networking industry. Additional information on this program can be found on Dataquest's Web site at gartner.com.
To purchase these reports, or to subscribe to Dataquest's Networking Worldwide program, please call 800/419-DATA, or 408/468-8009. More information about Dataquest's
programs, descriptions of recent research reports, and full text of press releases can be found on the Internet at dataquest.com.
GartnerGroup's Dataquest is the recognized leader in providing the high-technology and financial communities with market intelligence for the semiconductor, computer systems and peripherals,
communications, document management, software, and services sectors of the global information technology industry.
As the world's leading authority on IT, GartnerGroup provides clients with a wide range of products and
services in the areas of IT advisory services, measurement, research, decision support, analysis, and
consulting. Founded in 1979, with headquarters in Stamford, Conn., GartnerGroup is at the center of a
global community with more than 11,000 client organizations served by analysts in 80 locations worldwide. Additional information about the company is available on the Internet at gartner.com.
Copyright 1998, Business Wire
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