Networking Equipment Market Ends 1999 With a Bang, Reports Cahners In-stat Group

Business Wire, March 13, 2000

Business Editors/High-Tech Writers

SCOTTSDALE, Ariz.--(BUSINESS WIRE)--March 13, 2000

According to a recent report released by Cahners In-Stat Group, the worldwide networking equipment market reached $10.6 billion in Q4 1999, a 25 percent increase over the same period last year, resulting in a record quarter for this market. In-Stat expects the networking equipment market to reach $11 billion by the end of Q1 2000.

"Although growth is expected to slow in Q1 2000, the networking equipment market will pick up steam in Q2 2000 and Q3 2000, fueled by enterprise backbone purchases and continued service provider network build out," said Shannon Pleasant, Director of In-Stat's Voice & Data Group.

In-Stat's Q4 1999 market review also found:

-- Quarter to quarter growth was driven primarily by WAN hardware, i.e. Access
Concentrators, ATM WAN equipment and Frame Relay equipment. The 16 percent
increase in combined sales of ATM and frame relay multiservice switches was
driven by the rapid deployment of convergence applications such as xDSL, VoIP,
VPNs and e-commerce.

-- Although North America continues to dominate network hardware sales, taking
53 percent of the market in Q4, Europe, Asia and Latin America are heating up,
and combined, are expected to represent the majority of networking sales in
2000.

-- Cisco maintained its number one market share ranking, followed by 3Com,
Nortel and Lucent. The strength of these four was reflected in reorganization
and acquisition activity among the bottom half of the top networking vendors,
i.e. Cabletron's complete reorganization, as well as Alcatel's acquisition of
Newbridge.

"LAN equipment markets are relentlessly being hindered by price erosion," said Gemma Paulo, Research Analyst for In-Stat's Voice & Data Group. "With the exception of L3 Switches, rapid commoditization continues to stifle revenue growth in the Shared Media Hub, NIC and the L2 Switch markets."

The report, Q4 1999 State of the Networking Equipment Market, No. CQ0004M8, provides quarterly market shares and forecasts for the major networking hardware segments.

Part of In-Stat's new quarterly research service, the Quarterly Networking Review analyzes technology and market trends impacting the overall networking hardware market.

For more information or to purchase the report, please call Matt Woods at 617/630-2139; mwoods@instat.com or visit http://www.instat.com/catalog/cat-cq-equip.htm to purchase online. Each report price is $3,495 USD.

Cahners In-Stat Group (http://www.instat.com) covers the full spectrum of digital communications research from vendor to end-user, providing the analysis and perspective that allows technology vendors and service providers worldwide to make more informed business decisions.