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Asia
Pacific Watch
May
21, 2004
APAC
networking market to grow 9 percent in 2004
SINGAPORE
-- According to the latest results from IDC's quarterly
LAN Tracker, the 2003 networking market in the Asia
Pacific region (excluding Japan) reached US $3.5billion,
representing a 5 percent annual increase. While the
rebound was led by the telecom sector's expansion in
several developing countries, a more robust recovery
was hampered by unfavorable external factors such as
the SARS outbreak and the Iraq war in the first half
of 2003. Overall, IDC remains positive about the market
as the economy continues to recover, and forecasts a
9 percent growth in 2004 year-on-year (YoY) for the
total networking market (hub, switch, router and NIC
combined).
Rachel Lo, research manager, networking, IDC, said:
"The telecom sector was a significant contributor
to the switching and routing market. Operators in developing
markets like India, Malaysia and Thailand had invested
heavily in their core network backbone during the year,
while spending from telecom incumbents in Korea and
Taiwan remained strong. Besides spending on gigabit/terabit
routers and modular switches at the network core, operators
spent considerable amount on fixed port Layer 2 switches
for their metro Ethernet deployments."
Leading the growth in 2003 were countries such as India,
Malaysia and Australia where YoY expansions exceeded
20 percent in each country. India marked an excellent
2003 as telecom service providers continued with their
rapid nationwide infrastructure expansion plans, while
other sectors, such as services, manufacturing and finance,
also displayed strong demand. Growth in Malaysia was
driven by a series of large telecom projects as well
as government initiatives. In Australia, large-scale
metro Ethernet deployment buoyed growth as well as IP
telephony uptake. China, Hong Kong, the Philippines
and Singapore were the hardest hit markets in the region,
recording two consecutive years of total revenue declines
since 2002.
While
the telecoms sector contributed to the majority of
switch and router revenues for the second half of
2003, the government and finance sectors further fuelled
growth. E-government initiatives in India, China and
Thailand, where efforts were made to link different
ministries and government departments, also boosted
demand. The finance sector continued to gain momentum,
with core banking network upgrade projects found in
India, Thailand and Indonesia during the year as well
as infrastructure investment to link up branch offices
in major cities.
IDC expects the uptake of high-end solutions to propel
the networking market going forward. In the routing
space, the continuous investment on backbone networks
and IPv6 initiatives (especially from Korea) will
lead the growth of gigabit/terabit routing revenue.
In 2008, the total routing market revenue is likely
to reach US $1.9 billion with gigabit/terabit routing
making up 41 percent of this total.
In the switching space, growth is expected to come
from Layer 2 to Layer 3-7 switching migration, as
well as gigabit Ethernet (including 10 Gigabit) uptake.
The total switching revenue is likely to reach US
$3.4 billion by 2008, of which 50 percent will be
derived from gigabit Ethernet revenue.
Contact:
IDC
elng@idc.com
www.idc.com.sg
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