Bargain bandwidth as 10 Gigabit Ethernet and WLan prices are cut

Network equipment suppliers have cut prices substantially for 10 Gigabit Ethernet and wireless Lan equipment over the past month,...

Network equipment suppliers have cut prices substantially for 10 Gigabit Ethernet and wireless Lan equipment over the past month, writes Antony Adshead.

Analysts said the price cuts reflect the state of the market for the two technologies, with 10 Gigabit Ethernet likely to drop further in price, and WLan prices having bottomed out.

Suppliers Foundry and Force 10 have offered cuts of up to 40% on 10 Gigabit Ethernet equipment, while Proxim has made similar cuts on WLan equipment.

Gartner analyst Andy Rolfe said, "What we are seeing are parts of the natural cycle of the two technologies. Proxim is coming into line with the market, where Far Eastern suppliers have helped lower prices. WLans have come down the price curve. We will see reductions, but the big falls have happened.

"10 Gigabit Ethernet is much earlier in its lifecycle and we will likely see huge price falls as the manufacture of the technology is made more cost-effective and the market becomes more active. Unless there is a pressing need to buy now, wait for more price cuts."

In a move that prompted a Gartner "first take" report, Force 10 has cut the price of 10 Gigabit Ethernet line cards by 40%. According to Gartner, the first 10 Gigabit Ethernet ports cost more than $40,000 (£25,000) in 2002 and had inherent performance limitations. Force 10's cuts have reduced the outlay per port to about $17,000.

The analyst group said the price cuts offered a solution to a problem many enterprises have faced - putting more bandwidth in their backbones while keeping costs under control - and that they would result in 10 Gigabit Ethernet becoming mainstream in the enterprise.

Gartner also advised enterprises to use the Force 10 price cuts as a means of negotiating with other suppliers to lower their prices, although it said it expected other suppliers to follow suit anyway.

Foundry, meanwhile, has announced the release of a 10 Gigabit Ethernet card it said offers savings of up to 36% per port compared to previous pricing, with the stated aim of pushing 10 Gigabit Ethernet adoption in the Lan, Man and Wan.

In a move it described as "throwing down the gauntlet to Cisco", Proxim has announced it will cut prices on two of its Orinoco 802.11b/a/g enterprise access points by 34%.

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