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Worldwide Ethernet switch market (Layer 2/3) revenues reached $5,4-billion in the second quarter of 2013 (2Q13), representing a year-over-year decline of -1,1%, says IDC. On a sequential basis, the 2Q13 results increased 2,7% over a seasonally weaker first quarter.
Meanwhile, the worldwide router market rebounded nicely in 2Q13 with year-over-year growth of 3,7%, which was the highest growth rate seen in two years. Sequentially, the router marked jumped 14,6% compared to 1Q13.

From a geographic perspective, the second quarter results found the Ethernet switch market showing some strength in North America where it increased 4,9% year-over-year and 14,8% quarter over quarter, followed by Latin America with a small 0,9% year-over-year increase.

These gains were not enough to fully offset the -5,6% and -6,2% year-over-year declines in Asia/Pacific and Europe, Middle East & Africa (EMEA), respectively.

“The worldwide Ethernet switch market is increasingly a tale of two market segments with different market dynamics – the enterprise campus segment, which includes the network edge, and the higher growth data centre segment that is driving 10GbE and 40GbE growth as cloud rollouts continue to increase,” says Rohit Mehra, Vice President, Network Infrastructure at IDC.

“It’s also interesting to note the increasing divergence in the performance of the regional and country markets across the various theatres, driven not just by macro-economic issues, but also the state of maturity of data centre and cloud deployments.”

10Gb Ethernet switch (Layer 2/3) revenue increased 12,9% year-over-year to $2-billion while 10Gb Ethernet switch port shipments grew a strong 52% year-over-year to 4,7-million ports in 2Q13. 10GbE continues to be the primary driver of the overall Ethernet switch market, with the early stage 40GbE starting to reach critical mass as a stand-alone segment.

The worldwide Layer 4-7 switching market returned to positive year-over-year growth in 2Q13 with its 2,4% sequential and 1,2% annual increase this quarter.

The worldwide enterprise and service provider router market performed well in 2Q13, increasing 3,7% year-over-year and 14,6% sequentially in 2Q13. As with the Ethernet switch market, North America was the best performing region this quarter with a strong 10,7% year-over-year increase.

Latin America increased a healthy 6,4% year-over-year and EMEA also showed positive growth with a 1% year-over-year gain as macroeconomic conditions start to improve. On the other hand, Asia/Pacific router revenue declined -5% year-over-year.

From a vendor perspective, Cisco’s Ethernet switch (Layer 2/3) market share in 2Q13 held steady from last quarter at 62,2%. Cisco’s market share in the fast growing 10GbE market segment was 67% in 2Q13.

HP’s Ethernet Switch revenue increased 10,4% quarter over quarter and was essentially unchanged from the second quarter one year ago. As a result, HP’s market share increased to 9,4% in 2Q13, up from 8,7% last quarter and 9,3% in 2Q12.

“As the market evolves towards a unified network edge in the enterprise, Gigabit Ethernet (GbE) is expected to hold its own for the foreseeable future as we look at new applications for the emerging Internet of Things,” says Petr Jirovský, senior research analyst in IDC’s Networking Trackers Group.

“Of course, regional and country-level variances are going to be pronounced, so vendors are best advised to factor those in while working on their near to mid-term strategies.”