IDC reports strong growth in the LAN switch market in EMEA in 4Q05

AMSTERDAM – March 3, 2006 – IDC's EMEA LAN Switch Tracker shows that in the fourth quarter of 2005 the LAN switch market in EMEA continued to grow in terms of both port shipments and revenues.

Port shipments increased by 10.6% from 18.5 million ports in 3Q05 to 20.5 million ports in 4Q05, and revenues increased slightly by 0.8% to $1,267.5 million in 4Q05, compared to $1,258.0 million in 3Q05.

In 4Q05, fast Ethernet port shipments increased surprisingly strongly by 10.2% to 14.3 million ports and revenues increased 2.3% to $406.2 million.

Gigabit Ethernet port shipments increased by 11.7% to 4.7 million ports and revenues grew marginally by 0.2% to $801.8 million in EMEA in 4Q05.

As a result of the increased demand for fast Ethernet LAN switches and strong price erosion in the Gigabit Ethernet segment in 4Q05, the average sales price (ASP) of LAN switches declined strongly by 8.9% to $61.9 per port during the quarter, compared to an increase of 1.5% in the period 2Q05-3Q05.

During 4Q05, a number of vendors were able to grow both their port shipments and revenues with double digits, namely Nortel, Alcatel, Belkin, and SMC (Accton), and as a result were able to grow their market shares.

The largest vendor measured in revenue in 4Q05 was Cisco, with a market share of 65.8%. During the fourth quarter, Cisco lost most of its revenue market share it gained in the previous period. HP Procurve, Cisco's main rival in this market, was able to increase its revenue market share. The other major LAN switch vendors were Nortel, 3Com, and Extreme.

"The overall EMEA LAN switch market grew in 4Q05, as demand for LAN switches was strong, but due to strong price erosion, revenue increased only slightly," said Peter Hulleman, research manager with IDC's European Telecommunications and Networking group.

IDC's EMEA LAN Switch Tracker contains detailed information on quarterly shipments and revenues segmented by vendor, six technologies, OSI layers (2/3/4-7), and three form factors for 23 countries in the EMEA region.

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