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Enterprise Router Revenue Slides In 2Q

Enterprise router revenues slid slightly over the last year, according to a new report from Infonetics Research, but demand remains high and will grow to two million units shipped by 2008.

Revenues did rise 4% in the second quarter of this year over the previous quarter, but were down some 7% compared to the same period last year. Nevertheless, the stagnant revenues do not reflect a diminished demand for enterprise routers. The number of units shipped rose 6% between the first and second quarters of this year, and 13% from the second quarter of last year to the second quarter of 2005. Infonetics expects enterprise router shipments to swell 22% by 2008.

Secure routers have become a particularly hot commodity, with both revenues and shipments up 17% in the second quarter, following an even hotter first quarter. Revenues were $114 million, representing 64,000 units shipped. "Router spending continues to shift toward built-in security, as evidenced by solid gains in the secure segment, the only sector with revenue keeping pace with unit shipments," Infonetics Research directing analyst Matthias Machowinski said in a statement. "That's good news for manufacturers, as this shift will help them combat price erosion."

Cisco remains the undisputed leader in the enterprise router market, with Allied Telesyn maintaining its second place position with a significant increase in shipments.