The LAN switch market is shrinking, but demand for products is higher than ever.
Falling prices are the cause for this paradox in the Ethernet switch market. A recent report from In-Stat/MDR shows that revenues from 2002 sales of Ethernet switches dipped from $US14.9 billion in 2001 to $US12.4 billion in 2002. However, port shipments jumped 12 per cent over the same time, going from 137 million ports shipped in 2001 to 154 million in 2002.
Layer 3 switches are one of the hottest product types. The report says Layer 3 was the fastest growing segment of the LAN switch marketing, jumping 13.8 per cent in port shipments.
Overall prices for LAN ports went from $US109 per port in 2001 to $US86 in 2002. Meanwhile, the average Gigabit Ethernet port dropped from $US802 to $US584 over that time. Despite falling prices, however, Gigabit made up only 5 per cent of Ethernet switch port shipments last year.