Market Overview:
The Ethernet switches and routers market facilitates connectivity and communication in modern societies. Ethernet switches enable connectivity within local area networks by forwarding data packets between connected devices using MAC address tables. Similarly, routers connect multiple networks and facilitate wide area communication using network layer protocols like IP. With growing hyperconnectivity through IoT devices and advances in technologies like 5G, edge computing and more, demand for networking equipment that can handle immense data traffic is surging.
The Global Ethernet Switches And Routers Market is estimated to be valued at US$ 21.04 Bn in 2024 and is expected to exhibit a CAGR of 12% over the forecast period 2024 To 2031.
Key Takeaways:
Key players operating in the Ethernet switches and routers market are Huawei Technologies Co. Ltd., ZTE Corp., Cisco Systems Inc., ADVA Optical Networking SE, Nokia Corporation, Ciena Corporation, Infinera Corporation, Fujitsu Ltd., ECI Telecom Ltd., Telefonaktiebolaget LM Ericsson, NEC Corporation, Juniper Networks Inc., Coriant GmbH, Huawei Marine Networks Co. Limited, NTT Electronics Corporation, Lumentum Operations LLC, Plaintree Systems Inc., Marben Products, Smartoptics AS, Shenzhen HiSilicon Technologies Co. Ltd.
Growing connectivity needs have fueled demand for switches and routers globally. Trends like hyperconnectivity through IoT, 5G rollout, increasing internet usage, and remote working are propelling the market forward. Manufacturers are developing more capable equipment to handle higher traffic and data loads from these evolving technologies and usage patterns.
Several networking companies are also expanding their global footprint to capture growth opportunities in developing markets. Regional distribution networks are being fortified while strategic acquisitions help strengthen multinational presence and service capabilities. Standards-based open interfaces also promote global adoption.
Market Key Trends:
One of the key market trends is the evolution of internet protocol or IP-based networking. As IP protocol has become the basic building block of communication infrastructure, almost all switches and routers sold today are IP-based. This shift has standardized networking hardware globally and opened opportunities. Another significant trend is the ongoing transition to 100Gbps and above switching infrastructure to handle demand surges from technologies like 5G telecom networks and cloud computing. Networking companies are collaboratively working on specification development in such high-speed domains. Open networking initiatives and investments in virtualization technologies that enable software-driven operations are some other notable Ethernet switches and routers market trends.
Porter’s Analysis
Threat of new entrants: The Ethernet Switches And Routers Market Growth has high barriers of entry due to the presence of established players. New entrants require capital-intensive infrastructure setup to manufacture networking hardware.
Bargaining power of buyers: Buyers have moderate bargaining power due to the availability of ethernet switches and routers from different vendors with varying product specifications and price points. However, switching costs are low for buyers.
Bargaining power of suppliers: Component and chipset suppliers have moderate bargaining power due to the availability of alternative suppliers. However, established players have long-term contracts with suppliers for steady supply.
Threat of new substitutes: There is no direct substitute for ethernet switches and routers. Advances in wireless technologies pose a potential threat.
Competitive rivalry: The market is dominated by a few major players and fierce price competition exists among vendors to gain market share. However, product differentiation and customer loyalty mitigate competitive pressures.
Geographical Regions
North America accounts for the largest share of the ethernet switches and routers market in terms of value. This is attributed to heavy investments in cloud computing and data center infrastructure by major technology companies in the US.
The Asia Pacific region is slated to grow at the fastest CAGR during the forecast period. Proliferation of 5G networks and expansion of national fiber optic networks spur demand for ethernet networking hardware, predominantly in China, India, and other developing Asian countries.