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Switch Shipment Stutter. Routers Keep Ticking

Seasonal buying patterns slammed switching acquisitions and 10G port shipments, but did nothing to cool router shipments or Gig E ports. Those are the highlights from Infonetics Research's Enterprise Router and L2-L7 LAN Switches reports released earlier today.

"The enterprise network infrastructure markets took a breather in the first quarter, but that's due to seasonal buying patterns, not a slowdown," said Matthias Machowinski, directing analyst at Infonetics Research. "Often companies have end of fiscal year that will cause companies to clear budgets which may inflate the 4th quarter and then pickup then 2nd and 3rd quarter."

"Year-over-year, sales are markedly higher as organizations continue to upgrade their aging infrastructure. Overall, we expect to see healthy growth over the next few years for enterprise networking gear. The massive Ethernet switch market will post big gains in port shipments in 2006, but because of slashed 1G and 10G port prices, revenue will remain flat until pricing stabilizes sometime in 2007, after which we'll see a return to revenue growth."

Enterprise router manufacturers saw revenue roar back last quarter, reaching $1 billion worldwide in the first quarter and expected to grow to $4.8 billion in 2009. Cisco continues to own the high-end of that market reaching 77 percent of revenue, followed by Juniper, Huawai and Nortel.

Most of the sales though come from low-end and midrange routing largely driven by the hundreds or thousands of business that still need to connect sites together, make upgrades as they move to IP telephony, or upgrade branch routers with security, says Machowinski.

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