Viewpoint

1. In 2000, the computer network equipment market scope of China reached ten billion RMB, an increase 28.5 percent over 1999.

2. The network equipment market, which have been rigged by foreign products for a long period of time, are making challenges through its domestic factories.  The potential of domestic product development is very large, but domestic factories rely mostly on middle and low-end product fields.  Some products are equivalent to foreign products, but a great many products are shown to be lacking in reliability and stability when compared to foreign products.

3. The demands which will affect the network equipment market of China from 2001 to 2003 hinge mainly on aspects such as: enlarging the capacity of data networks、building bandwidth networks in cities、the deepening of subdivisions in the vocational-user information project, the building of braintrusts in local areas, and the development of informational spaces for middle and small enterprises.

4. In the high-end market, the technology of routing and switching will fuse gradually into a singular product, and integrated business platforms, which hold onto many protocols, will appear.

5. Switches in the 10M market will shrink, and switches in the 100M will become the mainstays of the market, and the Ethernet switch in the 1000M-technology market will burgeon.

6. Because the price of low-end switches will be decreased greatly, and with the disadvantages, such as the restrictions on speed with hub connections to the Internet, will cause the market to shrink and wash out.

7. Modems will be the most common connection to the Internet, and its market quotient will extrude into the network card and business markets with each unit’s increasing LAN.  In the aspect of bandwidth connections, Cable Modem and ADSL equipment, at present, is affected largely by operator policy.  At present, the market is uncertain.

8. The next market leaders will be decided by technology competition in fields such as operating systems、processor CMOS chips、network administration systems, etc.

9. Domestic factories will enter into this market.  In order to create a well-known brand, they must have increased strength in advertising, publicizing themselves in the marketplace.  These factories say that their products have a high ratio of performance to price, so they attract consumers who are sensitive to the price.

10. In 2000, the furious market competition was the competition for channels, because good channels can give a factory facing furious market competition higher efficiency and a faster market response.

11. Network equipment manufacturers of China, and some telegraph level equipment manufacturers should cooperate actively and recruit each other to their own mutual advantage.  The government should adhere to grasping large manufacturers and setting small manufacturers free, and selecting excellent manufacturers, and supporting strong manufacturers.  It should encourage enterprises to annex and combine, adopting stratagems for larger groups and larger corporations, boosting up integration competition.

12. The increase of the network equipment market will continue to keep the actual tendencies from 2001 to 2003.  The growth of network equipment should be about 25 percent annually from 2001 to 2003.

I. Overview of network equipment market environment in year 2000

1. Economy environment

2. Industry environment

3. Technology environment

4. Policy environment

5. Finance environment

II. Overall market shares for network equipment in 2000

1. Market gross scope

2. Market development speed analyses

3. Market structure analyses

4. Area market analyses

5. Industry market structure

Chapter Highlights

This chapter discusses the characteristics of the computer network equipment market in china regarding market shares, market development speed, market structure, regional market, and the industry market structure in 2000. In the year 2000，the scope for the computer network equipment market in China reached as high as ten billion RMB, with a 28.5 percent increase over the year 1999. Switches and routers still held up the main market quotient in the network equipment market in 2000. Thereinto, the switch market reached 4.2 billion RMB, and the router market reached 4 billion RMB.

III. Network Equipment Market Analyses for year 2000

1. Router market analyses

a. General market situation

b. Market scope

c. Market development speed

d. Characteristics of the market

e. Market structure

2. Switch market analyses

a. General market situation

b. Switch market scope

c. Switch market development speed

d. Switch market characteristics analyses

e. Switch market structure analyses

3. Hub market analyses

a. General market situation

b. Hub market scope

c. Hub market development speed

d. Hub market characteristics analyses

e. Hub market structure analyses

4. Network card market analyses

a. General market situation

b. Network card market scope

c. Network card market development speed

d. Network card market characteristics analyses

e. Network card market structure analyses

5. Modem market analyses

a. General Modem market situation

b. Modem market scope

c. Modem market development speed

d. Modem market characteristics analyses

e. Modem market structure analyses

Chapter Highlights

This chapter, in detail, analyzes several products’ subdivided markets having to do with network equipment in China in 2000. In 2000, the domestic router market, especially the high-end router market, lived basically under the sun of network equipment manufacturers of other countries.  Because the domestic router market’s capacity increases at high rate annually, so domestic factories have large spaces to develop.  Switches are high-end products, but with the price of switches decreasing rapidly, approaching the price of hubs, so the router market appears to be increasing at a high rate.  The hub is only used in old network connections and bandwidths of lower demand.  A seemingly obvious trend should be the replacement of the hub by the Ethernet switch. The network card is a lower connection product, with the prevalence of computers and web-users increasing, it will most likely have a high market development speed.  Today’s networking product market is a fierce, dog-eat-dog jungle.  Modems have a large market share. The development of the Internet allows us to actively connect product markets。Although high speed connecting technology like Xdsl and Cable Modem have developed rapidly, because of their standards and costs it will take them a long time to achieve prevalence in our country.

IV. Analyzing the Network Equipment Market Competition Situation in 2000

1. Product competition

2. Technology competition

3. Quality and brand competition

4. Price competition

5. Channel competition

    a. Foreign factories pay attention to fellowship

    b. Domestic factories develop channels that gradually deepen

6. Service competition

Chapter Highlights

Product renewals and updates quicken, new technology emerges endlessly, prices continue to decrease—these factors, along with the incandescent channels of competition, make up the framework characteristics of the network equipment market and the field of competition in China in 2000.  This chapter discusses the general situation of the network equipment market in China in 2000.

V. Factors most likely to effect network equipment market development from 2001 to 2003

1. Demand will affect the market development

a. The high speed development of Internet and increases in Web-users

b. The backbone network of telecommunications will enlarge its capacity to pull in the high-end market.

c. The enterprising Internet-connection project will be a strong impetus to increase the network equipment market.

d. The demands of hardware and the establishment of .com Companies will cause the network equipment market to grow.

e. Network security is becoming an increasingly profitable market.

2. Technology affects the market development

a. IP+ATM technology will be fuse for high end products

b. Hub will gradually be replaced by switch

c. Market stratagems of manufacturers will be far seeing.

3. Channel stratagems of manufacturers will affect market development

Chapter Highlights

The key factor, which will directly affect network equipment market quantity forecasting from 2001 to 2003, will be the development of the network equipment market from 2001- 2003.  This chapter analyzes how some factors, such as demand, and technology and channels of manufacturing will affect market development.  This chapter also discusses developing product and technology trends.

VI. Forecasting Network Equipment Market Quantity from 2001 to 2003

1. Gross forecasting

2. Structure forecasting

a. Router market forecasting

b. Switch market forecasting

c. Hub market forecasting

d. Network card market forecasting

e. Modem market forecasting

Chapter Highlights

Even after several years, the network equipment market will keep increasing at high speed.  Forecasting of market sales shows that sales of network equipment in China will reach twelve billion and five hundred million RMB, and its rate of increase will reach 25 percent.  Various demands will influence the network equipment market in China.  They hinge mostly on aspects such as the growing capacity of data networks, bandwidth network building in cities, the deepening of subdivisions in the vocational-user information project, and the building of intelligent high tech parks in each area, as well as the development of middle and small enterprise information.  The latent demands mostly concentrate on campus networks, and increasing attention and demand of economical network building for middle and small enterprises.

VII. Conclusion and Suggestions

1. The manufacturer who is new to market adventures should adopt a cooperative manner.

2. Use price-war cautiously to boost profitability of enterprises.

3. Put innovative stratagems into practice.

4. Face the market, and improve service and increase product quality.

5. Concentrate advantages and emphasize breakthroughs.

6. Act according to the demands of users.

7. Strengthen international collaborations.

Data

In year 2000, the computer network equipment market scope of China reached ten billion RMB, but the market scope was seven thousand, seven hundred and eighty million RMB in 1999. The rate of increase in 2000 was 28.5 percent greater than that of 1999. The network equipment market scope of 1996 to 2000 is shown in figure 1.

Figure 1       network equipment market scope from 1996 to 2000

(units:  hundred million RMB)

Data source: CCID

The network equipment market has seen rapid development with national information building, such as government and enterprise connections to the Internet, and a tidal wave of families connecting to the Internet.  The rate of growth has reached 38.1 percent and 34.1 percent in 1998 and 1999.  It continued to develop rapidly and reached 28.5 percent.  It is shown in figure two.

Figure 2  network equipment market speed from 1996 to 2000

         Data source: CCID

In the next three years, network equipment markets will increase at high speeds. The gross should be ten million, eight hundred and twenty-five thousand in 2001, thirteen million, four hundred and thirty-two thousand in 2002, and sixteen million, two hundred and forty-eight thousand in 2003. It is shown in figure three.

Figure 3      network equipment market forecasting figure (unit: ten thousand)

Data source: CCID

This text is an abstract from CCID Information Counselor Corporation’s Network Equipment Market Investigation Yearly Report on China from 2000 to 2001.  For details, please query《Network Equipment Market Investigation Yearly Report on China from 2000 to 2001》）.