Cisco's core share holds steady

Despite Juniper leading in expensive 100G Ethernet deployments, Q1 router share looks the same for Big 3

The service provider core router market is expected to undergo an upgrade cycle as 100Gbps Ethernet gains in adoption. This could build on the 11% growth the market realized in Q1, its fifth consecutive quarter of double-digit year-over-year growth, according to Dell'Oro Group.

The service provider core router market was $631.2 million in the first quarter of 2010, according to Dell'Oro. In the fourth quarter it was $783.9 million, a hike of 24%. So an 11% boost in Q1 - to $700.63 million - would actually be a sequential drop of just under 11% from Q4. This bucks the trend of sequential revenue increases every quarter since Q3, 2009.

Dell'Oro though believes the market is poised for a significant shift in technologies and increased competition.  All of the major vendors have introduced new high capacity and scalable systems, and service providers will be evaluating, testing, and eventually purchasing these products in the near future, the firm states.

Back in Q4, Dell'Oro said 100G Ethernet port shipments generated "meaningful" revenue for the first time, most of which were deployed on Juniper T1600 routers. Dell'Oro postulates that at an average selling price of $200K to $300K per port, 100G Ethernet could have contributed $20 million to $30 million in revenue for Juniper in Q4.

And though Cisco's CRS-3 contributed minimal revenue in Q4 due to prolonged testing and evaluation, Dell'Oro expects it to ramp and account for more significant revenue in the first half of 2011. But in Q1, Cisco, continued as the market leader with 7% year-over-year growth. Juniper was still second, with a 13% increase, and Huawei was third, with 34% growth, according to Dell'Oro.

All were down sequentially though. Cisco was down 10% from the $455 million it registered in Q4. Juniper was down 11% from the $242 million it logged in Q4; and Huawei declined 7% from the $78 million revenue it realized in Q4. Yet market share remained steady for all three in Q1 from Q4: Cisco at 58%, Juniper at 31% and Huawei at 10%.

For the full year of 2010, the service provider core market was $2.73 billion. Dell'Oro's forecast for 2011 is $3.05 billion, or a hike of... 11%.

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