Lucent Price Drop Latest Shot in Gigabit Ethernet Price War

Lucent Technologies has lowered North American list prices of three 10/100 Mbps Ethernet switching modules for its Cajun Gigabit Ethernet line. For example, the 20-port, 10/100 Mbps Ethernet module for Lucent's top-end Gigabit Ethernet platform—the Cajun P550—has been lowered 33%, from $5,995 to $3,995.

With the decrease, the chassis-based M5520-100TX Module for the seven-slot P550 switch is priced at less than $200 per port. The company is also reducing prices on some of its stackable Cajun P110 Switching System product line. The price of Lucent's 16-port Cajun P116T Stackable Switch has been reduced to less than $125 per port, and the price of the company's 25-port Cajun P115G Stackable Switch has been cut to $85 per port.

These substantial price reductions are not surprising in view of the rapid consolidation of the Gigabit Ethernet market.

"Gigabit Ethernet switches are following the same price curves as 10 Mbps and 100 Mbps Ethernet before them but at a much accelerated rate," says Craig Johnson, principal of PITA Group, a Portland, OR-based consultancy. "[The price drops] are basically almost on a logarithmic scale this time around because all the big boys are offering product in this space."

Johnson cites networking vendors such as Cabletron Systems Inc., who have landed on hard financial times and see Gigabit Ethernet as a hot new market.

"Cabletron has very low prices to try and buy share early on. It is a big share game right now," he adds.

Lucent launched its Cajun Gigabit Ethernet line last summer. It has obtained the products through the acquisition of Gigabit Ethernet startup Prominet Corp. with a $200 million stock deal early last year.