Networking equipment to grow to $50 billion

By Staff -- Purchasing, 7/13/2000

Worldwide networking equipment grew only 3% to $10.8 billion in the first quarter, but revenue will be $50 billion for the year, according to Cahners In-Stat.

Networking revenue growth was 13% in the fourth quarter. "Although growth slowed in Q1 2000, the networking equipment market will pick up steam in the remaining quarters of 2000, fueled by enterprise backbone purchases and continued service provider network build out," says Gemma Paulo, research analyst for In-Stat's Voice and Data Service. In 1999, the networking equipment market was $38 billion.

"With the exception of high-end switches, LAN equipment markets are suffering from rapid price erosion," she says. That impacted revenue in the first quarter. She says quarter-to-quarter growth was driven primarily by digital modems, ATM WAN switches and VoIP gateways. The greater-than-expected 7% growth in ATM switches was driven by the rapid deployment of Broadband services, VoIP and network convergence. DSL and cable modem revenues combined increased 28%, and additional growth is expected as obstacles to deployment are increasingly overcome.

Cisco maintains its number-one marketshare ranking, followed by Nortel, 3Com and Lucent.