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LAN switch and router markets struggling to recover

The economic slowdown is still troubling areas of the networking market, according to IDC figures. Revenues for the fourth quarter 2001 reveal that both the router and LAN switch markets are 25% down on the previous year.

The economic slowdown is still troubling areas of the networking market, according to IDC figures. Revenues for the fourth quarter 2001 reveal that both the router and LAN switch markets are 25% down on the previous year.

Although quarter-to-quarter, the LAN switch market showed some signs of recovery with flat growth of 1.4% and revenues of US$3.4 billion, router revenues continued to decline, falling by 4.6% to US$2.9 billion.

The disappointing sales in the enterprise high-end router market are to blame for the poor revenues, says IDC. While the recovery in the Gigabit LAN switch market has also proved slower than expected.

"For the near future we see a buyers’ market for routers,” says Paul Strauss, research manager, enterprise networks research, IDC. “With market growth constrained, vendors are fighting for share and in many cases cutting prices. In contrast, LAN switch prices are declining at a normal rate.”

However, IDC is predicting that both markets will level out and begin to pick up in the second half of the year.

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