Gartner: SPR Market Rebounds

STAMFORD, Conn. -- The worldwide service provider router (SPR) market totaled $455.4 million in revenue in the second quarter of 2003, a 6 percent increase from the first quarter of 2003, according to Gartner, Inc. (NYSE: IT and ITB). This marks the first quarter of growth in the worldwide SPR market since declines began a year ago, and the positive results are consistent with the expectation that the SPR market is positioning itself for a recovery in 2004.

"Both Cisco and Juniper reported strong sales in high-end routers and gained revenue from North American and European service providers, which indicates recovery as they begin to build out their backbone networks," said Jennifer Liscom, principal analyst for Gartner's worldwide Telecommunications and Networking group.

Cisco Systems continued to lead the worldwide SPR market in the second quarter of 2003, claiming 54.6 percent of worldwide SPR revenue (see Table 1) and 52.9 percent of shipments (see Table 2). Nortel boosted its revenue almost 80 percent with large shipments to China and took over the third-place spot from Redback. Redback had an unusually weak quarter; however the financial restructuring that was completed during the quarter should work to increase customer confidence.

{Table 1}

"Although Cisco is continuing to dominate the market, Juniper, the No. 2 vendor in revenue and shipments, also continues to perform well," Liscom said. "Higher-end systems sales coupled with higher-end card interface revenue contributed to an increase in average selling price for the quarter."

{Table 2}

Gartner defines SPRs as carrier-class routers capable of providing multigigabit bandwidth in support of high-speed WAN interfaces. These carrier-class devices are typically designed for installation in network infrastructure and support the Internet Protocol suite.

Additional market information for the SPR market is available in the Gartner Dataquest Market Statistics report "Worldwide Service Provider Router Market Shares, 2Q03." This report provides a breakout by region and function, and can be purchased on Gartner's Web site at www.gartner.com.

This analysis is provided by Gartner's worldwide Telecommunications and Networking group. This group provides an analysis for the full spectrum of telecom and networking issues. To keep up to date on the latest telecommunications issues, please visit Gartner's Telecommunications Focus Area at www.gartner.com/telecom-mkt. To purchase a report or subscribe to Gartner programs, call 408-468-8000 or go to www.gartner.com.

Gartner Inc.