VDC FINDS SWITCH CUSTOMERS EASILY CONVERTED

Natick, Massachusetts - Many OEMs purchasing switches are changing vendors as a result of pricing or lead time issues, affecting the market share of some switch manufacturers, a recently completed study by Venture Development Corporation (VDC) reports. Volume V of VDC's "2002 Global Switch Market Intelligence Service", entitled "Analysis of Buyers and Sellers," finds that 40% of OEMs interviewed reported changing switch vendors in the previous year.

Long lead times and price increases were the most identified reasons to change switch vendors. With many switch types available at rock-bottom prices from a variety of sources, OEMs will not put up with a problematic vendor for very long. OEMs most often substituted between 25 and 50 percent of their switch purchases when using a new vendor. The swap may be either permanent (if it is based on a problem that is unable to be resolved) or temporary (in the case of alternative sourcing).

"This turnover is indicative of a more competitive market in which low cost switch manufacturers from around the world are offering products with increasingly higher quality," says VDC analyst Jacob Millette. "This affects the market share of those suppliers unable to simultaneously cut costs and manufacture a quality switch."

Report of Change in Switch Vendors
(Percent of OEM Respondents)

Have Changed Vendors: 40%
Have Not Changed Vendors: 60%

To view the entire press release including charts go to
www.vdc-corp.com/components/press/02/pr02-46.html

Other highlights of the "Analysis of Buyers and Sellers" volume of the "2002 Global Switch Market Intelligence Service" include vendor market share broken out by geographic region, product type and consuming application segment as well as in-depth profiles of over 50 of the world's leading switch vendors.

For in-depth and ongoing coverage of the global switch market, visit VDC's website at www.vdc-corp.com or call VDC at (USA) 508.653.9000 to learn more about this important series, and other reports and services available.

December 2002

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ABOUT VENTURE DEVELOPMENT CORPORATION

VDC is a technology market research and strategy firm with over 30 years of experience in providing market research, strategic analysis and consulting services to technology companies worldwide.

VDC offers its clients a wide variety of research solutions tailored to meet their strategic business needs. These include highly customized consulting engagements, ongoing research services and select industry investigations. Through our considerable industry contacts, we also provide services related to acquisitions and the generation of key account leads.

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Report Availability
www.vdc-corp.com/components/annual/02/br02-43.html

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For further information regarding the "2002 Global Switch Market Intelligence Service" contact:

John Gordon, Senior Analyst
jgordon@vdc-corp.com

Marc Regberg, Senior Vice President
msr@vdc-corp.com


If you would like to subscribe to more VDC updates go to: www.vdc-corp.com/subscriptions




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