Slowdown in Networking

Growth in the networking equipment market decelerated sharply in 1997, rising just 16% to $26.4 billion, according to market researcher In-Stat, Scottsdale, AZ.

That pales in comparison to the romping 68% growth rate in 1996. While the developing economic crisis in Asia and a sluggish European market both helped put the brakes on, other factors may have played a bigger role, says Jeremy Duke, director of In-Stat's Communications Market Services.

Faced with a plethora of technology choices such as gigabit Ethernet, fast Ethernet and asynchronous transfer mode (ATM), many buyers chose to sit on the sidelines until the market sorted itself out, he says.

Consolidation in the telecom carrier market and falling prices in products such as adapter cards also checked growth, Duke adds. Some vendors, including Cisco Systems Inc., San Jose, and Ascend Communications Inc., Alameda, CA, beat the industry average, though.

Preliminary In-Stat projections call for 1998 growth to be only slightly more robust than 16%.