This IDC study discusses how the ATM switch market continues to struggle as leading network service providers (NSPs) start their migration to an all-IP network. The overall market declined more than 12% during the first half of 2004 and is forecast to decline 12% for the full year of 2004. Despite these challenges, the ATM switch remains an essential component of the ability of NSPs to offer frame relay and ATM services ? a $22 billion market and one forecast to grow moderately over the next few years.

ATM demand driven by a huge number of new DSL subscribers is starting to moderate due to the migration of DSLAMs based on ATM aggregation to Ethernet/IP. Price erosion and technology competition from IP/MPLS routers remain as market inhibitors. The ATM switch will continue as a key part of most large NSP networks, but it is unlikely to be a growth market for network equipment providers.

"A key problem for ATM switch suppliers is their quest to remain relevant as all major carriers have publicly committed to an all-IP network." ? Lee Doyle, group VP, Network Infrastructure