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LAN switch sales drop slightly in 2Q

FRAMINGHAM, Mass.-Worldwide sales of local area network switches declined 2 percent during the second quarter, following 13-percent growth during the first quarter, according to IDC’s Worldwide LAN Switch QView.

Despite the decline, the LAN switch market remains up 23 percent year-over-year. Port shipments were down 1 percent for the quarter, but they rose 34 percent from last year. IDC said Cisco Inc. remains the market leader with a 69-percent market share, followed by Hewlett-Packard Co., Nortel Networks Ltd., 3Com, Extreme and Foundry.

“Despite the dip this quarter, we believe that 2004 will be a growth year for LAN switching, currently forecasted around 3 percent,” said Max Flisi, research analyst in IDC’s Enterprise Networks Program. “Gigabit is certainly one of the main drivers, having already surpassed fast Ethernet in revenue terms in 1Q ’04. We expect this trend to continue as gigabit to the desktop and in datacenters becomes more prevalent.

“Meanwhile, prices are gradually coming down,” continued Flisi. “In light of that, we see 10-gigabit Ethernet ports, which are commonly used to aggregate gigabit connections, also increasing at an elegant pace.”

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