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Gigabit Ethernet prices in free fall

Gigabit Ethernet prices in free fall

Inexpensive Gigabit Ethernet switches and network interface cards are flooding the market as vendors race to put 1000Base-T products in their portfolio.

Copper-based Gigabit Ethernet began shipping en masse last year. Since then, prices have dropped steadily as vendors -- even market newbies such as Dell Computer -- have raced to put 1000Base-T products in their portfolio.

Several equipment makers have announced wares that offer low prices for Gigabit Ethernet connections along with additional management and switching functions.

Companies are increasingly using Gigabit to upgrade their LAN and this has helped keep the market strong, according to analysts. Cahners In-Stat Group reports 1000Base-T component sales grew 25 per cent quarter-on-quarter in 2001 while the overall Ethernet LAN switch market averaged around 3 per cent growth per quarter. Market leaders in terms of 1000Base-T switch shipments were Cisco with 47 per cent, followed by 3Com with 17 per cent and Hewlett-Packard with 11 per cent of the market.

"No one wants to replace [cabling] because it is so expensive," said Lauri Vickers, a Cahners In-Stat analyst. "Companies that may have had bottlenecks in the wiring closet but didn't have the budget to run in-wall fibre cabling are looking at copper Gigabit to solve those problems." Besides savings on cabling costs, Vickers said, the 1000Base-T equipment itself averages around one-third the cost per port of single-mode, fibre-optic cable.

The price of Gigabit Ethernet products the past few years has fallen dramatically. Research from IDC shows that the average price for a fixed-configured Gigabit Ethernet switch port has dropped from about $US800 per port when the technology was introduced in 1998, to $219 per connection this year. Likewise, Gigabit NICs have also come down in price from an average of $500 in 1999, to the $200 range today (roughly three times the price of 10/100Mbps Ethernet cards).

While inexpensive Gigabit NICs might seem to signal an imminent explosion of 1Gbps desktops, Vickers has more reserved predictions.

"[Vendors] are pushing Gigabit to the desktop, but we are still a ways away from that," Vickers said. "The economic slowdown has pushed off a lot of desktop purchases [in companies], and there still isn't a real killer app for it."


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