Heavy Reading: Carrier Ethernet switch/router market heading toward nearly $3 billion by 2014
JULY 12, 2010 -- Worldwide sales of carrier Ethernet switch/routers (CESRs) grew 14 percent year-over-year to $492 million in the first quarter of 2010, according to the Carrier Ethernet Switch/Router Quarterly Market Tracker service published by Heavy Reading, the market research division of TechWeb's Light Reading.
Heavy Reading projects the global CESR market will continue its recovery in 2010 due to increased signs of stabilization and underlying market fundamentals favoring a shift from legacy Sonet/SDH networks toward high-performance carrier Ethernet/MPLS-based networks.
"Although intense competition and the sluggish global economy has taken some wind out of CESR sales during the past two years, we continue to see indisputable, growing demand from network operators to deploy next-generation carrier Ethernet platforms to support business, wholesale, residential triple-play/VoD, and -- increasingly -- mobile backhaul applications," says Stan Hubbard, senior analyst for Heavy Reading and author of the CESR Quarterly Market Tracker. "We expect the CESR market to have a combined annual growth rate of nearly 10 percent between 2009 and 2014, reaching $2.94 billion at the end of this period."
The CESR market declined 4 percent quarter-over-quarter in 1Q10, following strong 19 percent sequential growth in the previous quarter, according to the CESR Quarterly Market Tracker. "We are impressed that the market held up so well, given that we typically see a sharper seasonal spending drop in the first quarter," adds Hubbard. "The market appeared much healthier than a year ago, when it fell 21 percent between 4Q08 and 1Q09."
Strong sequential CESR revenue growth for Cisco, Brocade, Extreme, and Ciena fueled a sequential increase in North American sales in 1Q10, according to CESR Quarterly Market Tracker estimates. Revenues in Asia, EMEA, and Latin America declined quarter-over-quarter, but all regions were up year-over-year.
Heavy Reading estimates that CESR market leader Cisco regained multiple share points between 4Q09 and 1Q10. No. 2 Alcatel-Lucent, No. 3 Huawei, and No. 4 ZTE lost some ground in 1Q10, but their market shares were virtually unchanged on a rolling four-quarter basis. No. 5 Brocade and No. 6 Extreme each gained a share point between 4Q09 and 1Q10.
Heavy Reading's CESR Quarterly Market Tracker delivers a complete accounting of telecom equipment manufacturer revenues in CESR sector, including quarter-by-quarter revenue and market-share breakouts for each supplier, sales by geographic region and application, and revenue projections through 2014 by region and application. The quarterly tracking service also analyzes each vendor's market strategy and identifies and analyzes customer wins, providing granular insight into this emerging market sector unavailable from other sources. It includes a comprehensive list of more than 300 operators and other entities around the world that have purchased CESR platforms.
The Heavy Reading report analyzes 21 vendors that are generating sales from CESR products or could be in a position to roll out CESR products within the next 12 months. Equipment vendors examined include: Alcatel-Lucent, ANDA Networks, Ciena, Cisco, ECI Telecom, Ericsson, Extreme Networks, Force10 Networks, Foundry Networks, Hitachi Cable, Huawei, IBM, Juniper Networks, Maipu, MRV Communications, Nokia-Siemens, Orckit-Corrigent, Tejas Networks, Telco Systems, Tellabs, and ZTE.
The CESR Quarterly Market Tracker is distributed in PowerPoint and Excel formats. Quarterly reports may be purchased individually or as part of an annual subscription service.