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Router Sales Up 14%, But Revenue Drops: Report

Enterprise router sales continued to rise in 2005, with an almost 300% rise in secure router shipments, though competitive price pressures put a damper on overall revenues, according to a new report from Infonetics Research.

In fact, while global unit shipments were up 14% last year, overall revenues took a 3% hit, down to $3.3 billion compared to $3.4 billion in 2004. Nevertheless, revenues recovered somewhat in the last quarter of 2005, up 6% over the third quarter, and worldwide revenues from secure router sales surged 121% from $363 million in 2004 to over $803 million last year.

According to Infonetics directing analyst Matthias Machowinski, the numbers show that 2005 was a good year in the enterprise router market. "Though revenue didn't quite keep pace with unit shipments, demand is solid," he said in a statement. "The transition from standard to secure routers is speeding up, with secure router revenue skyrocketing and unit shipments practically tripling in the last year."

Cisco continued to dominate the enterprise router market, accounting for 71% of units shipped and an 81% share of revenues. Huawei continued to hold down its second place position in both revenues and shipments, while Nortel was number three in revenues, a position it has been in for six of the last eight quarters.