Cisco did not forsake core markets in Q3

Infonetics router figures show gains, especially in edge

Despite talk of Cisco taking its eye off the switching and routing ball during the last quarterly conference call, the company had the largest revenue gain in the service provider router market in the third quarter, according to Infonetics Research. Both Cisco and Alcatel-Lucent posted double-digit percent sequential increases in revenue, thanks largely to edge router sales.

Huawei and Juniper tallied single-digit percent revenue gains in the quarter, according to Infonetics.

Cisco provided a dour outlook for its current fiscal second quarter, with revenue up only 3% to 5% from last year, while Wall Street expected a 13% hike. Cisco's stock tanked on the outlook and some analysts said Cisco had spread itself too thin in its 30 market adjacencies while forsaking its core routing and switching business.

But that was not the case, at least in calendar Q3, according to Brian White of Ticonderoga Securities:

The challenges discussed by Cisco during its earnings call last week have led investors to question the company's market share trends. However, the company actually gained share in the router market on both a sequential and year-over-year basis.

But calendar Q4, which overlaps with two months of Cisco's fiscal Q2, may prove differently, according to UBS:

4Q trends will be interesting to follow in light of Cisco's weaker year-end guide which included softness at US cable/MSOs.

Infonetics found that the service provider router and switch market - which includes edge routers, core routers, carrier Ethernet switches and ATM switches -- grew 5% from Q2 to Q3, to $3.3 billion worldwide. The overall market is up 21% from the third quarter of last year.      

In North America, the edge and core router market is up 41% from Q3 of last year, according to Infonetics.

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