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Ethernet market will grow, but sales of gateways will slow

30 January, 2015

The global market for industrial Ethernet infrastructure components was worth nearly $1.38bn in 2013, and grew by 7.1% to reach $1.48bn in 2014, according to a new study published by IHS. It predicts that sales will continue to grow with a CAGR of around 8.6% from 2013 to 2018.

Although average revenues have been growing faster than factory automation in general, manufacturers interviewed for the study reported considerable variations in their revenues both for 2013 and 2014. IHS says that this reflects how the market is highly influenced by individual projects, particularly in the process sector where fluctuations in capital expenditure can be severe, as companies react to economic and political events.

As well as providing detailed statistics and forecasts, the report predicts that

•  growth in the sales of Ethernet gateways will slow as new automation devices with built-in Ethernet connections are introduced;

•  routers designed for factory-floor use will be replaced by Layer-3 switches incorporating routing capabilities; and

•  the Asian market will continue to grow faster than EMEA (Europe, Middle East and Africa) or the Americas for the foreseeable future. However, the gap is closing as the runaway growth of China’s industry in recent years slows to a more sustainable pace.

The report also foresees the ultimate demise of the unmanaged Ethernet switch, which may be superseded by a new breed of low-cost, low-functionality layer-2 switches. IHS argues that the price difference between these two products will become negligible, making unmanaged switches pointless in much the same way as the industrial Ethernet hub has become extinct.

The IHS study is based on data supplied by manufacturers and suppliers of industrial Ethernet network components, such as gateways, switches, routers, wireless access points and connectors.

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