Research firm echoes Juniper router gain

Another market research firm has found that Juniper Networks increased its revenue share of the router market by seven percentage points in the fourth quarter of 2002.

Infonetics Research last week released figures that show that Juniper gained market share in the IP core router market for the first time since the fourth quarter of 2000, grabbing 23% of revenue, up from 16% in the third quarter of 2002. This concurs with recent finding from Synergy Research and Dell’Oro Group that Juniper increased revenue share by seven percentage points in the fourth quarter while Cisco lost an identical amount.

Juniper’s momentum is attributable to its T640 core router, which began shipping last year. Meanwhile, Cisco’s 12416 Internet core router is two years old, and the industry is awaiting Cisco’s response to the T640.

Worldwide revenue for service provider edge routers and switches, meanwhile, is up 5%, to $1.2 billion in the fourth quarter from the third, Infonetics found. But it is down overall for 2002 at $5.3 billion, a 37% decrease from 2001.

The 5% increase in the fourth quarter was driven by further investments in multiservice switches as service providers spent the remainder of their 2002 budgets, according to Infonetics.

Multiservice switches had a better fourth quarter than routers, as both the edge and core markets saw double-digit growth while router categories declined. Nortel led the forth quarter revenue market share for total multiservice switches – edge and core – with 28%; Lucent, Alcatel, and Cisco follow with 23%, 22%, and 21%, respectively, according to Infonetics.

The service provider router and switch market should grow between 19% and 25% from 2004 to 2006 as capex shifts to more data gear, especially as RBOCs build out national networks to be top tier data service companies, Infonetics predicts. The firm expects the market to reach $10.5 billion in 2006.

In optical, worldwide hardware revenue increased to $2.24 billion in the fourth quarter, which was up slightly from the third quarter for a full year total of  $9.82 billion, according to Infonetics. Many major manufacturers posted increases over the third quarter, including Alcatel, Ciena, Cisco, Huawei, Nortel, Siemens, and Tellabs, Infonetics found.

“Intelligent” optical hardware – data-aware equipment with remote configuration and remote service provisioning that can be deployed in mesh, star and ring topologies – is up 6% from last quarter at $1.71 billion, while legacy gear is down 15% to $528 million. Intelligent optical hardware makes up 76% of all optical hardware revenue in the fourth quarter, Infonetics says.

Legacy will decline to 18% of the total in 2003, and to 2% in 2006, the firm predicts.

Five manufacturers account for 57% of revenue market share for total optical hardware, including submarine. Alcatel leads with 15%, followed by Nortel, Fujitsu, Siemens, and Lucent.

SONET/SDH accounts for 69% of total spending, outpacing WDM at 30%. Top categories overall in terms of spending are metro SONET/SDH, at 57%; and long-haul WDM, at 22%.

The next-generation voice market continues to take baby steps. Worldwide revenue reached $191 million in the fourth quarter, a 15% increase from the third, totaling $1.2 billion in 2002, Infonetics found.

Until more media gateways and call control softswitches are deployed for voice over packet networks, many of the next generation voice product segments that are focused on new packet telephony-based services will remain small, the firm said. The complete migration from circuit to packet for Class 5 switches will take over 10 years, according to Infonetics.

The market will grow at a compound annual growth rate of 40% to reach $4.6 billion by 2006, the firm predicts.

Worldwide next-generation softswitch revenue reached $58 million in the fourth quarter, a 17% increase over the third. “Tremendous” growth is expected long term, with 2006 reaching $1.72 billion, the firm predicts.

Class 5 packet switches totaled $5.9 million in the fourth quarter, a 57% increase from the third. The remote access concentrator VoIP gateway heavyweights, Cisco and Lucent, increased their revenue share of the market to 83% in 2002, Infonetics found.