Cisco lost share in edge and core service provider routing in the fourth quarter of 2010, according to this video clip from TheStreet.com. TheStreet.com doesn't cite the source of its information but based on Cisco's Q2 performance and Q3 guidance, as well as analyst diagnosis of current and recent quarterly trends, it just may be the case.
UPDATE: According to Dell'Oro Group, Cisco actually gained 3.1% revenue share in core routers in 2010, and .9% between Q3 and Q4 of 2010. Juniper gained 1.3% from Q3 but lost 1.2% revenue share in core routers for the full year of 2010. Huawei lost 2.1% revenue share from Q3 and 2.2% in 2010.
Cisco's core switching and routing businesses are under pressure, with a disruptive product transition in switching contributing to a 7% revenue decline and eroding margins in that market. Routing revenue was up 4% from last year, but down 7% from Q1.
Meanwhile, sales of new products in new markets - data center/virtualization, collaboration/video, mobility, etc. - enjoyed healthy growth, an indication that Cisco's core business itself is transitioning away from bedrock products like routing and switching to those borne of the company's 30 or so market adjacencies.
Analysts say these trends suggest Cisco is also losing market share in routing and switching, and that the company is slashing prices in order to try and defend or maintain it.
But in service provider routing, Cisco lost share to the usual suspects in Q4, according to TheStreet.com. In core routing, Cisco gave up 5% share while Juniper gained 5%. In edge routing, Cisco lost 9% while Alcatel-Lucent gained 8% share. Says TheStreet.com's Scott Moritz:
All going in the wrong direction for Cisco in a market where it should be excelling. This is bad news for those looking for a quick turnaround for Cisco. It might take a little bit longer to regain the business lost in that core market.
UPDATE: TheStreet.com subsequently ran this correction on its report: Cisco lost 5% share in high-end enterprise routing, not service provider core.
In the third quarter of 2010, Cisco had a 46% share of the $1.5 billion market in edge routers, according to Dell'Oro. Alcatel-Lucent had a 21% share and Juniper 18%.
In core routing, Cisco had a 57% share of the $667 million market in calendar Q3, 2010, while Juniper had 30%, according to Dell'Oro.
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