High-end router market down 37% in 2002

7 March 2003 -- Restricted CapEx and cautious investment led to the high-end router market falling 37% in 2002 to USD3.5bn, says Synergy Research Group.

Mar 7th, 2003

7 March 2003 -- Restricted capital expenditure and cautious investment continues to weigh heavily on the high-end router market, with the market dropping 37% in 2002 to USD3.5bn.

Despite the challenging market conditions, Cisco and Redback posted annual market share gains (see Table).

Table. High-end router revenue Market share
__________2002___2001
Cisco............75.4%.....71.4%
Juniper.........12.9%.....15.6%
Redback.........3.3%.......2.6%
Nortel..............2.9%.......3.5%

For 2002, Cisco continued to demonstrate that established sales channels, strong customer support, and a strong balance sheet continue to positively influence purchase decisions by both telecom and enterprise customers. Redback's market share gains were helped by two important customer wins: Shanghai Telecom and Tele2 in Sweden.

In Q4/2002, Juniper gained market share in the service provider high-end market driven by strong European sales. Juniper is benefiting from its strategic relationships with Ericsson and Siemens. Also seeing market share gains in Q4/2002 were Redback and Nortel.

"Although no annual market share gains were measured for Nortel or Juniper, they, as well as Redback, continue to apply competitive pressure on Cisco," said Susana Vidal, industry analyst at Synergy Research Group. "We anticipate the competitive climate in the service provider core and edge router markets to continue to heat up as Cisco's coveted market position continues to be challenged, as measured by market share gains in Q4."

Synergy's coverage of the router market includes SOHO, branch and mid-size routers; enterprise and service provider edge routers; IP edge, broadband aggregation and IP services, and service provider core routers.

www.synergyresearchgroup.com

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