Worldwide Network Components Expenditures: Industry Research Report

Worldwide Network Components Expenditures

Published Date: December 2005

Published By: BCC Research

Page Count: 203

Order Code: R2-1136

Questions About This Report

E-mail a Colleague

Printable Page

Fax Your Order

Description

Table of Contents

Search Inside
this Report

Similar
Products

INTRODUCTION
Increasingly, businesses and consumers communicate in real time and networks have made it possible for companies and individuals to communicate effectively. They have become faster, less expensive, and simpler to deploy. Businesses and individuals have developed new applications to take advantage of high speed, multimedia friendly transmissions. Just about every type of device is being connected to business and consumer networks.

Behind these new networking advances is an ever-expanding array of semiconductors. Advances in wafer and silicon technology have enabled chip manufacturers to squeeze complex functions and functionality onto smaller and smaller spaces. As a result, network chips continue to be an area of prime interest for semiconductor suppliers. Because these newest semiconductors offer users a number of benefits, demand from network equipment suppliers has been rising.

This report will examine the silicon used to connect an ever-growing array of devices, from complex servers to nextgeneration phones, to networks. After defining the different market segments (10M Ethernet, VoIP), the report analyzes and forecasts market trends in each segment, and delineates technology trends and identifies markets leaders. Long-term economic, business, and other macro issues raised by these trends are also analyzed.

SCOPE OF STUDY
The report contains:

Examination of the silicon used to connect complex servers, next-generation phones, networks, etc.
Definitions of the different market segments
Outlines of the immediate and long-term commercial opportunities for vendors
Analysis and forecasts through 2010 of market trends in each segment and the long-term economic, business, and other macro issues raised
Delineation of technology trends
Identification of markets leaders.

METHODOLOGY AND INFORMATION SOURCES

Preparation of this report involved in-depth study and critical analysis of published data from a wide variety of world economic agency, US government, and private company sources. Industry projections have been made by BCC based on original studies of economic, social, and demographic information, as well as on critical examination of projections by industry analysts and those found in public sources. Information included in the report comes from primary BCC research, input from key suppliers in the various market segments, and reports from organizations, such as the U.S. Department of Commerce, The World Trade Organization, the 10G Ethernet Alliance, the Wi-Fi Alliance, the Institute of Electrical and Electronic Engineers, and the Internet Engineering Task Force. The projections are based on anticipated growth in the current base of network users, the emergence of new market sectors, movement among existing network users from low speed to higher speed options, the availability of new networking options throughout the world, and a push by suppliers to wire more devices in the home as well in business.

Another factor is the never ending improvement in silicon design. When new network components are first shipped, they sell at their highest price. Typically, pricing erodes from 5% to 20% per year depending on how long the components have been shipping. The higher price drops are associated with newer technology and vendors can make up for lower pricing by increasing volume. The lower end of the spectrum occurs with mature products; here vendors need to squeeze out costs by reducing expenses or improving production.

Since segments of the market, such as low-speed Ethernet connections are mature and stable, vendors have been examining new ways to leverage their technology. Markets, such as home and industrial automation offer them those opportunities. The need for higher speed network options corresponds to the never ending delivery of faster, more powerful computer systems. As companies and individuals take advantage of these advances, they find that their network connections slow down data transmissions, which reduces productivity. Consequently, they are looking to upgrade to faster networking options. Since vendors have shipped more than 3 billion Ethernet adapters and 450 million wireless connections, the migration from lower speed to higher speed connections provides suppliers with a recurring revenue stream. In addition, lower product pricing stemming from increased competition among suppliers has been expanding the market, so businesses, OEMs, and consumers can now afford additional network solutions.

The market for network silicon will be healthy in emerging market segments, such as Voice over IP (VoIP), and some of the potential revenue increases that vendors would like to reap will be offset by declining prices stemming from intense competition. Silicon vendors have been lowering the price of their products by streamlining manufacturing processes, moving facilities to inexpensive labor markets, such as China, and improving the design process. The revenue projections are based on a continued worldwide growth in consumer and business spending of 2%, which translates into expansion of numerous product categories, including the use of networking products. One item of caution, the projections could be lower if the world economy slips into a recession or a depression, events that are possible given the volatility in areas, such as the Middle East.

	Research Index \| Publishers \| My Account \| Contact Us \| About MindBranch
	Welcome Guest (Login/Register) \| 0 items