Users are spending less money on networking equipment in Canada, partly because they aren’t replacing the equipment that the already have.

According to Toronto-based Evans Research Corp., network equipment sales dropped 29 per cent, from US$365 million to US$259 million, between the first quarter

of 2002 and the same period this year.

Revenues for carrier products dropped 45 per cent because carriers are reducing capital expenditures. Sales of enterprise networking products (including switches, routers and network interface cards) dropped 22 per cent.

The figures were published last month in Evans Research’s first quarter segment update on networking. The report noted for many companies, the infrastructure they have in place works well, has a low failure rate and can support more network traffic.

Total Canadian revenues last year were US$1.249 billion and are projected to decrease to US$1.095 billion this year.

The decrease would be even greater if it weren’t for a significant increase in voice over Internet Protocol and wireless local-area networking equipment, said Albert Daoust, Evans Research’s director of special projects.

Evans projects 802.11-based wireless LAN equipment sales will increase by 25 per cent this year.

“”If it wasn’t for wireless, this industry could be shrinking at 15 per cent this year,”” Daoust said. “”Because of wireless, it’s only going to shrink by nine. What would otherwise be a horrendous year is going to be a year we can tolerate.””

During the first quarter of 2003, shipments of IP phones were 23 per cent higher than in Q1 of 2002.

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