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Managing Editor

Router sales signal carrier activity

Aug 25, 20032 mins
Cisco SystemsNetworking

Research firms say IP services are driving demand for equipment.

Two new reports show that the market for high-end routers has renewed life – perhaps a sign that carriers are finally starting to reinvest in their network infrastructures.

The worldwide high-end router market grew between 6% and 10% in the second quarter, according to separate data compiled by market research firms Gartner and Dell’Oro Group.

Gartner says the second quarter marks the first quarter of growth in this market since declines began a year ago, which followed massive capital expenditure cutting by service providers.

The new numbers might be “an early signal” that the market is poised for a recovery next year, says Gartner analyst Jennifer Liscom.”Both Cisco and Juniper reported that service providers are starting to buy again,” she says.

The worldwide service provider router market – which Gartner defines as any carrier-class multigigabit system for core or edge duty – totaled $455.4 million in the second quarter, a 6% increase from the first quarter, according to the firm.

Gartner found Cisco to continue its leadership in the worldwide service provider router market, claiming 54.6% of revenue and 52.9% of shipments, followed most closely by Juniper in both categories.

Nortel boosted its revenue almost 80% in the second quarter with large shipments to China, and displaced Redback Networks as the No. 3 supplier. Redback had an “unusually weak” quarter while undergoing a financial restructuring, Gartner says.

Liscom says she expects growth to continue for the next few quarters as carriers continue their IP network buildouts to meet and stoke demand among businesses for VPN services.

“Things are starting to look like we’re progressing to this IP network we’ve been talking about for so long,” she says.

Dell’Oro Group says worldwide sales of 10G bit/sec systems, used predominantly in the IP core, hit $170 million in the second quarter, an increase of 10% from the first quarter.

But the overall router market was flat, at $1.5 billion, the firm reports.

Router sales have hovered at this level for five consecutive quarters, with minimal quarter-to-quarter fluctuations, Dell’Oro says.

Dell’Oro also found that Cisco retained its market leadership in 10G bit/sec systems – but its revenue grew only 2%, compared with No. 2 Juniper’s 23% gain, and No. 3 Avici Systems’ 32% growth.

Managing Editor

Jim Duffy has been covering technology for over 28 years, 23 at Network World. He covers enterprise networking infrastructure, including routers and switches. He also writes The Cisco Connection blog and can be reached on Twitter @Jim_Duffy and at

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