Report: Core Router Market Falls 22%

The router market shrank by four percent in 2001, and service providers spent substantially less on core routers in recent months, according to the latest router report from Infonetics Research Inc. (see Infonetics: Core Slips in 2001).

Infonetics says worldwide revenues for service provider core routers decreased 4 percent to $2.4 billion for the year 2001. Just two vendors, Cisco Systems Inc. (Nasdaq: CSCO) and Juniper Networks Inc. (Nasdaq: JNPR), continue to own the market, and when their revenues suffer, it's indicative of overall spending patterns.

The biggest dip came in the second half of the year, when revenues shot down 22 percent between the third and fourth quarters.

”Juniper had a dismal [fourth] quarter, and Cisco didn’t do very well either,” says Infonetics analyst Kevin Mitchell. In the quarter, sales of Cisco’s 12000 and 12400 routers decreased 20 percent, and sales of Juniper’s M160 and M40 routers fell by 31 percent, Mitchell says.

In quarterly and annual sales, the TSR and SSR products from Avici Systems Inc. (Nasdaq: AVCI; Frankfurt: BVC7) appeared to hold steady, albeit contributing only about 2 percent to overall revenues.

Other players were a wash: "Charlotte’s Web Networks Ltd. and Alcatel SA (NYSE: ALA; Paris: CGEP:PA) both claim to have shipped core routers for revenues, but the figure must be very low," says Mitchell, noting that "neither vendor has been able to produce customer or shipment data. Likewise, Pluris Inc. seems to have ongoing lab trials, but continues to push out its revenue target date." Now, he suggests, it's "likely to be 2Q02."

Mitchell cites the overall economic slump as a reason for the dropoff in core routing. But there are other forces at work, too. In Juniper’s case, Mitchell thinks speculation about the new "Gibson" router (see Juniper Mum on Core Router... ) may have caused carriers to bide their time rather than invest before a big rollout.

It looks as though higher Sonet speeds comprise a big part of what’s in demand in core carrier networks: Over 45 percent of Cisco’s core router revenues last quarter came from the vendor’s 12400 series, which has OC192 (10 Gbit/s) capabilities.

Infonetics says it will release its forecasts next week.

— Mary Jander, Senior Editor, Light Reading
xxxx1455 12/4/2012 | 10:56:31 PM
re: Report: Core Router Market Falls 22% Perhaps they are waiting for a real core router:
A router that really does have carrier grade reliability
A router that really is a terabit router
A router that really is scaleable
...as opposed to the enterprise closet boxes, which have been retagged as GÇ£core routersGÇ¥.
qqq 12/4/2012 | 10:56:24 PM
re: Report: Core Router Market Falls 22% Very true!
gumbydammit 12/4/2012 | 10:56:22 PM
re: Report: Core Router Market Falls 22% okay guys, *you* go and wait for that...*I* need to connect to the internet.....today.

is this related to todays article which talked about cisco's increase in market share over juniper

funny how that kinda stuff just doesn't make the press here at LR....or did I (they) just miss it?

can you plz make the cisco pie piece a little smaller? there must be *some* skew which can make the juniper share the largest.....j/k.

gumbydammit 12/4/2012 | 10:56:21 PM
re: Report: Core Router Market Falls 22%
yep, *I* missed it. sorry about that. i resend that remark, please kindly remove. i should update my browser window more often! /g.
brichter 12/4/2012 | 10:55:59 PM
re: Report: Core Router Market Falls 22% >okay guys, *you* go and wait for that...*I* need >to connect to the internet.....today.

Well put.
optical_man 12/4/2012 | 10:55:58 PM
re: Report: Core Router Market Falls 22% "okay guys, *you* go and wait for that...*I* need to connect to the internet.....today."

YOU GET IT! You win the business of the Largese Phone Company.
They have a vision to move forward, but need something TODAY.
You really see what is going on don't you?
(I'm being totally serious here.....this is a revalation that most fail to get, but I think you got it.)
Who you working for? We'll double your salary, and have your ex-boss taken out back and beaten with a legacy atm blade for kicks. He won't know what hit him, but he never did, did he?
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