Service Provider Router and Switch Market Poised For Growth

Despite a flat first quarter of this year, the worldwide service provider router and switch market is poised to experience considerable growth over the next three years, according to Infonetics Research.

Quarterly revenues from router and switch sales totaled $1.63 billion in the first quarter of 2005, and though that represents only a 1% increase over the previous quarter, it is 16% higher than the first quarter of 2003. Despite the lackluster first quarter performance, moreover, Infonetics, expects the market to show market improvement over the next few years, with first-quarter revenues in 2008 reaching $8.9 billion.

"In a quarter sometimes marked by seasonal declines after a usually strong fourth quarter, the market, as a whole, was surprisingly resilient, in large part due to the strength of IP router sales," Infonetics Research analyst Kevin Mitchell said in a statement. "Growth in the service provider router and switch market continues to be fueled by IP routers, with routers accounting for 70% of revenue and switches 30% in the first quarter."

Not surprisingly, Infonetics found that Cisco remains the IP router market leader with a dominant 58% market share. Cisco's IP router revenues grew 8% in the first quarter, up 9% over the same quarter last year. Juniper maintains it's strong second-place presence in the market with a 27% share. Although its revenue growth matched the market as a whole last quarter, it was up an impressive 57% over the same quarter last year.