The service provider core router market posted a 4% year-on-year increase in the first quarter of 2014, according to a newly published report by market research firm Dell'Oro Group. The first three months of the year marked the fourth consecutive quarter of year-over-year growth.
While Infonetics Research earlier labeled indecision regarding software-defined networking (SDN) a drag on carrier router sales growth (see "SDN holds up carrier router and switch spending says Infonetics"), Dell’Oro expects even more rapid growth for core routers through 2014.
"Two major factors have driven growth: first, pent up demand due to low investment in 2012; and second, the demand for new higher capacity products," said Alam Tamboli, senior analyst at Dell'Oro Group.
"The four major vendors in the market have all introduced higher capacity products that make better use of 10 and 100 Gigabit Ethernet ports, and many vendors have stepped outside of their traditional flagship core routing products and have introduced products tailored to new use cases in the core," he added.
The four major vendors own 97% of the market, according to at Dell'Oro. Cisco Systems Inc. (NASDAQ: CSCO) holds the top spot, but lost four percentage points of its four-quarter trailing market share versus the year-ago period as revenues grew but the market grew faster.
In second place, Juniper Networks maintained its four-quarter trailing market share above 25% of the market. Third-placed Huawei Technologies Co Ltd. gained two percentage points in four-quarter trailing market share versus the year-ago period, with continued high-exposure to its domestic market, China.
A relative newcomer to the market, Alcatel-Lucent (Euronext Paris and NYSE: ALU) gained two percentage points in four-quarter trailing market share versus the year-ago period, putting the vendor in fourth position.
Dell'Oro Group says its "Routers Quarterly Report" covers the service provider core, edge, and enterprise router markets for current and historical time periods. The report includes analysis and statistics for vendor market shares, revenue, average selling prices, and unit and port shipments.
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