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Sales of ethernet switches and routers hit 7-year low in Q1

Sales of ethernet switches and routers hit 7-year low in Q1

Covid-19-related supply-chain issues, uncertainty undercut revenues from switches and routers

Credit: Dreamstime

Sales of all categories of ethernet switches and routers were down 14 per cent in the first quarter of 2020 compared to Q1 last year, the worst quarter in seven years, according to Synergy Research Group.

“In a pre-pandemic world we’d have expected total vendor revenues from switches and routers to have been a billion dollars higher that what we actually saw,” said John Dinsdale, chief analyst at Synergy. Revenues for the quarter were US$9.1 billion, down from $10.58 billion in last year’s first quarter.

The problem wasn’t entirely that Covid-19 forced businesses to change plans about buying the gear.

“On balance the Q1 hit was driven more by supply-chain issues rather than by soft demand,” he said. Demand is still high from service providers, but not so for enterprises, where “some sectors will take several months before returning to some form of normality.” He said the supply-chain problems should be resolved relatively quickly.

Credit: Synergy Research

First-quarter sales of enterprise routers took a 15 per cent hit vs. last year, but revenues from service-provider routers took the biggest hit, down 19 per cent from Q1 in 2019, according to the research.

Revenues from some classes of hardware did increase though. With networks rapidly deploying 100 GbE and 25 GbE fixed switches, both of those segments actually grew in the first quarter, Synergy said.

On a relative basis, Cisco did well in the quarter, commanding market shares of 57 per cent for ethernet switches, 65 per cent for enterprise routers and 35 per cent for service-provider routers, leading all its competitors in aggregate. The next five were Huawei, Nokia, Juniper, Arista Networks and Hewlett Packard Enterprise.


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