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Service Provider Router And Switch Market Skyrockets

The worldwide service provider router and switch market grew dramatically in 2004, reaching $1.6 billion in the third quarter, according to a new report from Infonetics Research. The reports said that the trend will to continue, and total sales will reach $8.4 billion by 2007. Cisco remains the top vendor, with 58% of total sales.

According to Infonetics' quarterly worldwide market share and forecast service, the worldwide revenue for service provider routers and switches grew 11% from the second to third quarter of this year, reaching $1.6 billion. With a 28% year-over-year increase, Infonetics expects the market to reach $8.4 billion in revenue by 2007, representing a compound annual growth rate of 15% from 2003.

The core router market experienced substantial third quarter growth, reaching $1 billion in quarterly revenue for the first time. The big winners among the vendors were Cisco Systems and Juniper Networks, which control 58% and 36% market shares, respectively. However, Juniper experienced the greatest growth, with core router revenues up 26%, compared to 5% for Cisco.

The biggest surprise for Infonetics was the continued strong growth in service provider multiservice switches market, where worldwide revenues rose 9% in the third quarter. Year-over-year, the increase was 24%, with the highest growth in the network edge segment.

According to Infonetics directing analyst Kevin Mitchell, the strong growth in both markets has exceeded all expectations. "Despite the focus on IP/MPLS, even the maligned multiservice switch market saw strong quarterly gains, driven by broadband aggregation, wireless backhaul, and organic frame relay and ATM services growth," Mitchell said in a statement. "However, the router market continues to make strong sequential and annual gains with the edge and core segments growing, and the market share battles in all markets are getting more interesting to watch."