Gigabit price free-fall good for users, bad for vendors

Shipments of Gigabit Ethernet ports grew slightly in the third quarter of this year, while diminishing per-port prices caused the total market revenue for Gigabit gear to shrink, according to research firm Dell'Oro Group Inc.

Although shrinking revenues are bad news for vendors, enterprises are taking advantage of the falling prices of Gigabit Ethernet products to upgrade LAN backbone connections, and even to deploy 1000M bit/sec connections to desktops.

According to Dell'Oro, Gigabit Ethernet port shipments grew 6 percent last quarter, while revenue shrank 5 percent worldwide. The average price for a Gigabit Ethernet port last quarter was US$571, down almost $200 from a year ago.

The development of copper-based Gigabit Ethernet as an alternative to traditional fiber-based products has helped to drive down prices. Companies such as Asanté, 3Com, D-Link, and Netgear have recently introduced 1000Base-T products costing as low as $100 per port. These products still only represent around 20 percent of all Gigabit ports shipped, according to Dell'Oro.

Cisco remained the top company in terms of market share for Gigabit Ethernet last quarter, Dell'Oro says. The network giant raked in 47 percent of the $688 million sold in Gigabit equipment last quarter. In second place was Extreme Networks with 8.6 percent, followed by Enterasys with 8.5 percent. Nortel, Foundry and Alcatel rounded out the market with 7.4 percent, 5.9 percent and 3.6 percent of the market respectively.

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