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The worldwide market for enterprise and carrier Ethernet switches grew 16 percent sequentially in revenue in the fourth quarter of 2001, but that rosy news isn't likely to repeat itself in the current quarter, according to market research company Dell'Oro Group Inc.

Large organizations and service providers spent US$2.8 billion in the fourth quarter on 100M bps (bit-per-second) and 1G bps Ethernet switches, according to a statement released Friday by Dell'Oro. That figure represented a double-digit jump from the third quarter but a significant decline from the year-earlier quarter, according to Seamus Crehan, an analyst at Dell'Oro, in Redwood City, California. In the fourth quarter of 2000, revenue in this category exceeded $3.7 billion.

The sequential increase was partly a normal seasonal jump and partly due to projects that were pushed back from the third quarter after the Sept. 11 terrorist attacks, Crehan said. He sees little growth in the remainder of the year.

"We expect very slight growth, in the single digits," Crehan said. Along with the weak economy, the state of technology is a factor, he added.

"Right now, there's no real compelling, must-have technology that will drive an upgrade," he said.

The next major advance, 10-Gigabit Ethernet, began shipping in small volume in the fourth quarter but probably will not ship in volume to enterprises until it is offered at an attractive price, probably next year, Crehan said. Service providers will be the first adopters of 10-Gigabit Ethernet.

Cisco Systems Inc. continued to supply the majority of Ethernet switches in this class, holding a 60.2 percent market share in terms of revenue, roughly equal to a year earlier. Nortel Networks Corp. came in a distant second place with 7.3 percent of market revenue. Enterasys Networks Inc., 3Com Corp. and Extreme Networks Inc. filled out the top five.

The sequential growth in demand was strongest in the modular Layer 2 switch segment, which is composed of expandable, chassis-based devices that do not perform routing functions. However, that growth was a recovery after two quarters of steep decline. The survey also covered switches that perform Layer 3 routing and ones that can give data packets special treatment based on the type of application and other factors.

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