Carrier Ethernet switch/router market has strong showing in Asia

OCTOBER 1, 2009 -- Huawei and ZTE gain ground as Cisco's market lead continues to decline, according to Heavy Reading.

OCTOBER 1, 2009 -- Worldwide sales of Carrier Ethernet switch/routers (CESRs) grew 5% quarter-over-quarter in 2Q09 to $452 million, 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 2H09 to end the year at about $1.8 billion. Prospects appear good for the CESR market to reach $2.78 billion by 2013, due to underlying market fundamentals favoring a shift from legacy SONET/SDH- and ATM-based networks toward high-performance Carrier Ethernet/MPLS-based networks.

"The worldwide CESR market generally demonstrated signs of increased stabilization, with growth in Asia, Latin America, and North America more than offsetting continued weakness in Europe," says Stan Hubbard, senior analyst for Heavy Reading and author of the CESR Quarterly Market Tracker. "Double-digit sequential revenue growth by No. 3 CESR supplier Huawei and No. 4 ZTE propelled Asia to a new all-time regional quarterly market share high of 38%. Meanwhile, Latin America had an impressive triple-digit jump, fueled by a particularly strong performance by No. 2 Alcatel-Lucent in the region."

The market managed a recovery in 2Q09 despite intensifying vendor competition, service providers' continued limited access to capital, and the sluggish global economic recovery. "Increased competition has been especially harmful to Cisco, which lacks a next-generation flagship CESR platform," says Hubbard. "Today, there are two dozen suppliers of CESR platforms. That's double the number of players in 3Q07, when Cisco owned 58% of a market that was actually larger than in 2Q09.

Heavy Reading estimates that No. 1 Cisco's market share fell another 4 points sequentially in 2Q09 and closed 19 points lower than its share high in 3Q07. No. 2 Alcatel-Lucent held steady, while No. 3 Huawei and No. 4 ZTE each gained several share points in 2Q09. Brocade was No. 5 and Extreme was No. 6 in the most recent quarter.

Heavy Reading's Carrier Ethernet Switch/Router Quarterly Market Tracker delivers an 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 2013 by region and application. The quarterly tracking service also analyzes each vendor's market strategy and identifies and analyzes customer wins.

The Heavy Reading report analyzes 21 vendors that are now 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 Systems, ECI Telecom, Ericsson, Extreme Networks, Foundry Networks, Hitachi Cable, Huawei, IBM, Juniper Networks, Maipu, MRV Communications, Nokia Siemens Networks, Nortel Networks, Orckit-Corrigent, Telco Systems, Tejas Networks, Tellabs, and ZTE.

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