LAN Market experienced a 26% decrease in market revenue in 2003

September 07, 2004

Manila, September 07, 2004 – The Philippines LAN Market suffered a sharp decline of 26% in terms of revenue in 2003, according to a latest report from IDC Philippine's PIO Report Series, Philippines Enterprise Networks 2003-2008 Forecast and Analysis . A combination of global and local events that transpired that year contributed the market's overall decline. Among the global uncertainties that contributed to the decline are the SARS outbreak in the region and the invasion of US to Iraq. Although these factors did not give an immediate impact on the market, it was evidently felt on the second half of 2003. On the local front, the main inhibitors were the political uncertainties and scandals that happened throughout the year. Although the effect of these incidents on LAN is indirect, investors became extra careful in bringing more investments in the country. As a result of the wait-and-see attitude of the enterprise market, the router, NIC and hub market were badly affected.

This report also identifies Cisco as the number one vendor in the overall LAN Market for 2003 followed by four others: 3Com, D-Link, HP, and Linksys. Cisco focused on telco, government, education, banking, manufacturing and call center industry. Meanwhile, 3Com continued its focus on the SME market for 2003. LAN switches continued to dominate the market with a 63% market share while the router market took up 31.6%. The rest of the market was consisted of network interface cards (NICs) with combined desktop NIC and server NIC and hubs equipment with .07% market share. Of all the LAN products, the hub market has the biggest drop in revenue as it is rapidly leading to obsolescence.

"Recent moves by Cisco, 3Com and D-Link clearly illustrate, flexibility and adaptability, are the keys to long-term profitability and survival in the enterprise networking industry," says Ramil Mabeza, Market Analyst, IDC Philippines.

Despite of the overwhelming decline of the LAN market, IDC expects 2004 to be a better year for LAN and anticipates a tougher competition among major vendors, barring all the major political and economic crisis locally and abroad. The positive outlook is due to the increasing adoption of broadband technology as well as the steady demand from call centers which is one of the active IT spenders.

For more information about purchasing the research, please contact Hazmi at +603-2169-7526 or hyusof@idc.com. For press enquiries, please contact Stephen Chong at +603-2169-7521 or ckchong@idc.com.

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