Seasonal Inactivity Results In India Ethernet Switch and Router Market Decline In Q4 2013: IDC

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05 Aug 2014

According to International Data Corporation (IDC), the Switch market in India declined 11.3% Quarter-on-Quarter (QoQ) however a comparison with Q4 2012 shows a growth of 3.6% resulting in the Q4 2013 Switch market standing at USD 98.04 Mn.

In comparison, the Router market in India declined by (QoQ) 15.2%, and the comparison with Q4 2012 showed a decline of 6.0% resulting in the Q4 2013 Router market at USD 49.18 Mn.

According to IDC’s Quarterly APeJ Wireless LAN Tracker for Q4 2013, WLAN market in India declined by 11.5% on QoQ comparison but has grown by 15.9% when compared with Q4 2012, showing the seasonal trends in the WLAN market resulting in the Q4 2013 WLAN market standing at USD 30.47 Mn this quarter. IDC believes the increasing demand for “five-bar” coverage and intense competition will improve the WLAN market during the upcoming quarters.

The above numbers are testimony to the fact that Q4 2013 was an aberration in terms of growth of the market and this was largely a result of seasonal inactivity that one experiences in the months of November and December of any year, and the general slowness in the Indian market (due to pre-election lethargy).

Additionally, in the vendor landscape, though the major share is held by a few traditional vendors, innovation and encouragement across the complete value chain holds the key for other vendors in fostering their market presence.

There are a number of market transitions that are happening across the major sectors like the service provider segment - Banking, Financial Services & Insurance (BFSI), IT Services, Public Sector and Commercial sectors in India market.

These transitions, driven by macro-economic conditions in the country or technology changes, have deep implications for companies in these verticals in terms of how they compete, how they reach out to their customers, what their business outcomes are and how differentiated their customer experiences can be. Many top players’ agenda would be to tap into these potential  buyer trends to help better position their products (and messaging) to the evolving market conditions.

Figure 1

Source: Asia/Pacific Quarterly Ethernet Switch and Router Tracker Q4 2013 [excluding Japan]


Suman Bisht, Market Analyst, Enterprise Networking, IDC India, says, "LAN market in India is pegged to be driven by the big three verticals namely Government, Banking and Professional Services, although upcoming elections are bound to cut back some government IT spending. In addition to this, the telcos have already spent a huge sum acquiring spectrum licenses that cannot be passed on to the consumers directly and thus they would be cautious in spending on core routing expenses which is inevitable, given the pressure on existing bandwidth capacity and future data demand.”

Gaurav Sharma, Research Manager – Enterprise, IDC India, comments, "Incremental investments in this market will now be pegged against innovative and disruptive technologies like SDN rather than traditional switching and routing.  But even these would take some time to achieve a significant growth. While the basic infrastructure is in place now, all eyes would be on how to use this infrastructure more efficiently and scale it to be able to respond to new requirements like 4G."

IDC India Forecast

With upcoming elections and cautious enterprise spending, it would be the turn of SMBs to now fuel some part of the India growth story. The market is expected to turnaround post elections and a stable government that can push reforms and business-friendly policies would be the key.

Note: All comparisons, quotes and numbers on shipments above are calculated in customer revenues; aAll % are rounded off to the nearest digit.

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