Worldwide Ethernet Switch Market Increased 12.7 Percent in 4Q18

The worldwide Ethernet switch market (Layer 2/3) recorded $7.8 billion in revenue in the fourth quarter of 2018 (4Q18), an increase of 12.7% year over year, according to IDC. For the full year 2018, the market recorded $28.1 billion in revenue for a year-over-year growth rate of 9.1%.

Meanwhile, the worldwide total enterprise and service provider router market recorded $4.6 billion in revenue in 4Q18, increasing 15.6% on a year-over-year basis. For the full year 2018, the router market finished at $15.5 billion, an increase of 1.8% over 2017.

From a geographic perspective, the 4Q18 Ethernet switch market recorded strong growth in the Middle East & Africa region, which rose 15.7% in 4Q18 and 10.6% in 2018 compared to 2017. The Central & Eastern European region rose 14.9% in 4Q18 and was up 12.6% on the full year. The Asia/Pacific excluding Japan (APeJ) increased 10.5% and grew 15.5% for the full year 2018.

In the Western Europe region, the Ethernet switching market grew 12.1% year over year in 4Q18 and 9.1% for 2018. The Latin America grew 4.4% in the quarter and rose 1.4% for the full year. Canada's market grew 9.6% in the quarter and 9.0% for the full year. In the United States, revenues rose 3.6% in 4Q18 compared to 3Q18, but jumped up 15.9% year over year, driving annual revenues 6.6% higher in 2018 vs. 2017.

The worldwide enterprise and service provider router market grew 24.2% sequentially and 15.6% year over year in 4Q18 with the larger service provider segment rising 20.3% and the enterprise portion growing 2.2%. For the full year, the combined market increased 1.8% with the service provider segment driving 2.0% growth and the enterprise segment growing 1.2%.

The combined enterprise and service provider router market saw growth around the world, with APeJ growing 22.4% year over year in 4Q18 and up 13.6% for the full year. Middle East & Africa increased 17.6% year over year and 9.2% annually. The U.S., which is the largest worldwide market, was up 12.4% year over year but down 11.1% for the full year. Western Europe rose 12.9% year over year in 4Q18 and was up 4.9% for the full year.

Cisco finished 4Q18 with a 13.2% increase in Ethernet switching revenues and market share of 53.2%. For the full year 2018, Cisco switching revenues rose 5.2% over 2017 while recording 52.8% market share (compared to 54.8% in 2017). Cisco's combined service provider and enterprise router revenue increased 17.9% year over year in 4Q18, but was off 2.7% for the full year, giving the company 38.8% share in 2018.

Huawei's Ethernet switch revenue grew 6.0% in 4Q18 for a market share of 9.7%. For the full year 2018, Huawei's Ethernet switch revenues grew 20.2%. Huawei's enterprise and service provider router revenue increased 35.1% in 4Q18 and rose 22.5% for the full year, giving the company 28.7% market share in 2018.