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Study: Ethernet switch market on comeback trail

Ethernet switching gear bucks the sliding trend seen in the last few months of 2003, hitting a 16 percent growth rate in the first quarter of this year, research shows.

Ethernet switching gear has bucked the sliding trend seen in last few months of 2003, hitting a 16 percent growth rate in the first quarter of 2004, according to a new study.

The sector on the whole recorded total revenue of $3.2 billion in the first quarter, said the study released Thursday by Dell'Oro Group. That gain is substantial compared with the previous quarter, which had flat revenue growth.

Most of the first-quarter growth was driven by high-density Gigabit-over-copper switches and line cards meant for server and desktop connectivity, Dell'Oro said.

"While all major segments of the market grew, Gigabit Ethernet had a particularly strong quarter, with revenues from this segment exceeding fast Ethernet revenues for the first time," Seamus Crehan, director at Dell'Oro, said in a statement.

Synergy Research Group reported in February that a continuous fall in prices pushed down Ethernet switch revenue in the fourth quarter of 2003, even though shipments registered a slight increase.

In comparison, Dell'Oro said the 2004 growth was "exceptionally strong" partly because shipments and revenue were deferred from the fourth quarter of 2003. Normally, the first quarter is considered to be the weakest quarter of a year for the Ethernet switch market.

Among the companies that drove the growth were Cisco Systems, which retained the No. 1 position in market share, and Hewlett-Packard, which was ranked third. Cisco posted 25 percent quarterly growth, and HP saw 7 percent growth. Other companies in the industry had either negative or zero growth. --What's your take on this story? Visit News.com's feedback section.