11 Mar 2021

IDC's Worldwide Quarterly Ethernet Switch and Router Trackers Show Mixed Results in Fourth Quarter of 2020

Worldwide Ethernet Switch Market Declined 1.4% Year Over Year in Fourth Quarter of 2019; Router Market Increased 0.6%

NEEDHAM, Mass., March 11, 2020 – The worldwide Ethernet switch market recorded revenues of $7.5 billion in the fourth quarter of 2020 (4Q20), a decline of 1.4% year over year. For the full year 2020, the market recorded $27.8 billion in revenue for a year-over-year decline of 3.5%. Meanwhile, the worldwide total enterprise and service provider (SP) router market recorded $4.3 billion in revenue in 4Q20, which is a 0.6% increase on a year-over-year basis. For the full year 2020, the router market generated revenues of $14.9 billion, a decline of 4.0% compared to 2019. These results are according to the International Data Corporation (IDC) Worldwide Quarterly Ethernet Switch Tracker and Worldwide Quarterly Router Tracker.

Ethernet Switch Market Highlights

From a geographic perspective, the Asia/Pacific region, excluding Japan and China, declined 7.4% in 4Q20 and fell 5.3% for the full year with the market in India declining 14.0% in the quarter. China showed strong growth of 19.1% in 4Q20, leading to full-year market growth of 12.3%. Japan also had a strong quarter with revenues up 23.1% in 4Q20 and up 11.1% for the year. In Central and Eastern Europe, 4Q20 revenues declined 11.9% and were down 1.9% for the full year with Romania down 29.6%. Western Europe's Ethernet switch market declined 6.0% in 4Q20 and was off 8.9% for the full year; the UK market declined 11.1% in 4Q20. In the Middle East and Africa, revenues were down 9.4% in 4Q20 and were 2.9% lower in 2020 compared to 2019; the United Arab Emirates market declined 17.4% in the most recent quarter. The U.S. market declined 3.6% in 4Q20 and ended the full year down 6.6%. Canada's market declined 11.9% in the quarter and 9.6% on the year. Latin America's market was off 28.5% in the quarter and 20.4% for the full year.

Growth in the Ethernet switch market continues to be driven by the highest speed switching platforms. For example, port shipments for 100Gb switches rose 28.4% year over year to 7.4 million in 4Q20. 100Gb revenues grew 27.2% year over year in 4Q20 to $1.78 billion, making up 23.7% of the market's revenue. For the full year, 100Gb port shipments increased 40.0% in 2020 compared to 2019. 25Gb/50Gb switches also saw impressive growth with revenues increasing 33.5% to $655.0 million and port shipments growing 28.1% year over year. Lower-speed switches, a more mature part of the market, saw mixed results in port shipments and revenue as average selling prices (ASPs) in this segment continue to decline. 10Gb port shipments rose 20.5% year over year in 4Q20, but revenue declined 2.7% year over year. 10Gb switches make up 26.2% of the market's total revenue. 1Gb switch port shipments fell 1.3% year over year, with revenue in the segment declining 13.4%. 1Gb now accounts for 35.4% of the total Ethernet switch market's revenue. In 2020, datacenter ethernet switches made up 14.1% of all port shipments but 43.6% of the year's revenues. Non-datacenter switches, meanwhile, still account for the majority of the market's shipments (85.9%) and revenues (56.4%).

"The Ethernet switch industry continues to be a tale of two markets with higher-speed Ethernet switch ports proliferating in the datacenter and benefiting from demand from hyperscalers, tier-2 clouds, and some cloud-building large enterprises," notes Brad Casemore, research vice president, Datacenter and Multicloud Networks, IDC. "Meanwhile, the more mature non-datacenter market in the fourth quarter of 2020 continued to be challenged by the impacts of the COVID-19 pandemic, which caused some organizations to postpone or reassess campus network investments as they adapt to a hybrid workforce."

Router Market Highlights

The worldwide enterprise and service provider router market was relatively flat in 4Q20, increasing 0.6% year over year with the larger service provider segment growing 2.0% and the enterprise portion declining 3.1%. For the full year, the combined market declined 4.0% with the service provider segment down 2.9% and the enterprise segment declining 7.5%.

The combined enterprise and service provider router market had mixed results across the world with Central and Eastern Europe increasing 10.0% in 4Q20 and Western Europe growing 1.4% in 4Q20. The Middle East & Africa region rose 14.4%. The Asia/Pacific region, excluding Japan and China, declined 1.2% in the quarter while China grew 2.8% and Japan's market was up 4.0%. In the U.S., the market declined 6.8% in 4Q20 and in Latin America 4Q20 revenues were down 6.0%.

Company Highlights

Cisco's Ethernet switch revenues were down 11.8% year over year in 4Q20 and 9.5% for the full year 2020. In the hotly contested 25GbE/50GbE/100GbE segment, Cisco remains the market leader with 38.7% share in 4Q20. Cisco's combined service provider and enterprise router revenue fell 13.8% year over year in 4Q20 and was down 15.1% for the full year, giving the company 32.9% share in 2020.

Huawei's Ethernet switch revenue declined 1.5% in 4Q20 but was up 4.8% for the full year. Huawei ended 2020 with market share of 10.5%. The company's combined SP and enterprise router revenue increased 7.1% in 4Q20 and rose 6.0% for the full year, giving the company 32.9% market share for the full year.

Arista Networks saw Ethernet switch revenues increase 13.6% in 4Q20, rebounding late in the year. For the full year, Arista's Ethernet switch revenues declined 9.9%. 100Gb revenues account for 72.9% of the company's total revenue, reflecting the company's longstanding presence at hyperscaler datacenters, cloud providers, and large enterprises.

HPE's Ethernet switch revenue increased 20.7% year over year in 4Q20. The strong end to the year gave the company a 1.9% full-year increase in 2020 compared to 2019. HPE ended the year with 5.8% market share.

Juniper's Ethernet switch revenue fell 4.1% year over year in 4Q20 and was down 3.0% for the full year, bringing its market share to 3.0% to end the year. Juniper saw a 9.0% increase in combined enterprise and SP router sales in 4Q20 and a 0.7% decline for the full year, bringing its market share in the router market to 10.8%.

"From a geographic perspective, there was uneven growth across the globe in both the Ethernet switch and router markets, indicating the uneven impact that the COVID-19 pandemic continues to have on economies around the world," said Petr Jirovsky, research director, IDC Networking Trackers. "As enterprises and service providers look toward 2021, IDC expects the need for high-speed networking equipment to continue to drive these markets."

The Worldwide Quarterly Ethernet Switch Tracker and the Worldwide Quarterly Router Tracker provide total market size and vendor shares for the Ethernet switch and router technologies in an easy-to-use Excel pivot table format. The geographic coverage for both the Ethernet switch market and the router market includes nine major regions (USA, Canada, Latin America, Asia/Pacific (excluding Japan and China), Japan, the People's Republic of China, Western Europe, Central and Eastern Europe, and Middle East and Africa) and 60 countries. The Ethernet switch market is further segmented by speed (100Mb, 1000Mb, 10Gb, 25Gb, 40Gb, 50Gb, 100Gb), product (fixed managed, fixed unmanaged, modular), layer (Ethernet Switch, ADC) and place in the network (datacenter and non-datacenter). Measurement for the Ethernet switch market is provided in vendor revenue, value, and port shipments. The router market is further split by product (high-end, mid-range, low-end, SOHO), deployment (service provider, enterprise), connectivity (core, edge), and the measurements are in vendor revenue, value, and unit shipments.

About IDC Trackers

IDC Tracker products provide accurate and timely market size, vendor share, and forecasts for hundreds of technology markets from more than 100 countries around the globe. Using proprietary tools and research processes, IDC's Trackers are updated on a semiannual, quarterly, and monthly basis. Tracker results are delivered to clients in user-friendly Excel deliverables and online query tools.

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