MAY 29, 2009 -- Market research firm Infonetics Research (search Lightwave for Infonetics) released the first quarter edition of its Service Provider Routers and Switches report, which tracks IP core and edge routers, Carrier Ethernet switches (CES), and multiservice ATM switches. The report indicates that carriers have significantly cut back on purchases of these platforms.
"In the fourth quarter of 2008, we saw the start of carrier cautiousness with year-over-year growth for the service provider router and switch market up only 4%. Now in the first quarter of 2009, the market is down 13% year-over-year, indicating the full effect of operator protective behavior in the thick of the downturn. While the first quarter of every year is typically a down one for the carrier router and switch market, 1Q09 showed the deepest sequential decline in years," says Michael Howard, Infonetics Research's co-founder and principal analyst for carrier and data center networks.
"On the up side, if carriers keep to their capital expenditure guidance given for 2009, spending will have to pick up in the second half of the year. With Internet and data traffic growing unabated, service providers are going to have to upgrade their equipment to keep up, or risk losing customers," Howard added.
Highlights from the report include:
- As expected, worldwide sales of service provider routers and switches (IP core and edge routers, Carrier Ethernet switches, and multiservice ATM switches) were down in 1Q09, including down 17% sequentially and 13% year-over-year.
- Asia Pacific was the only major world region with increased spending on service provider routers and switches in 1Q09 (up 3% sequentially and up 11% year-over-year).
- Aggressive competition in the IP core and edge router segments is changing the market leaderboard. Cisco is still the market leader, but Alcatel-Lucent, Huawei, and Redback are all growing their router revenue share.
- Although the quarter was down, the main driver for the carrier switch and router market are the same and at play in all regions. Carriers are transforming their networks from TDM to packet IP to handle the fast-growing Internet, mobile, data, broadband, and video traffic.
Infonetics' service provider router and switch report provides vendor market share for Alcatel-Lucent, Ciena, Cisco, Ericsson-Redback, Extreme, Foundry, Fujitsu, Hitachi Cable, Huawei, Juniper, NEC, Nokia Siemens, Nortel, Tellabs, ZTE, and others.
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