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Infonetics Research: Big quarter for IP router vendors Cisco, Juniper, Huawei, Fujitsu, Foundry, NEC

Worldwide sales of service provider IP core and edge routers continue at a fast clip, reports communications market research firm Infonetics Research, with manufacturer revenue up 17% quarter-over-quarter in 2Q08 and 40% year-over-year from 2Q07.

Infonetics' quarterly report, Service Provider Routers and Switches, shows Cisco posted a 15% gain in combined IP edge and core router revenue, giving them over half the worldwide market, a position they've maintained since 2005, despite growing competition. The biggest gain of the quarter was made by Fujitsu, who jumped from the #9 position to #6 worldwide. Huawei, Foundry, and NEC all posted strong double-digit gains in 2Q08, and Juniper and Alcatel-Lucent, the perennial #2 and #3 players (respectively) in the IP router market, each posted respectable single-digit revenue gains.

"Since the upturn in 2003 from the great telecom downturn, IP router revenue has grown 20% to over 30% each year, and we expect the trend to continue in 2008. The 2 big drivers for continued growth are expanding traffic and IP transformation projects, with traffic the stronger factor. Of course, spending has to slow or level out at some point, and it will. Cisco, Juniper, Alcatel-Lucent, Huawei, and others hope not, but the overriding damper is that telecom capex growth is slowing (with exceptions in India and China), with indications that capital intensity (the ratio of capital expenditures to revenue) is moving downward, coupled with slow, single-digit revenue growth for many carriers," said Michael Howard, principal analyst and co-founder of Infonetics.

Other highlights from the report:

--  Worldwide service provider core and edge IP router revenue hit $2.6
    billion in 2Q08
--  Revenue from carrier Ethernet switches (CES) grew just 3% from 1Q08 to
    2Q08
--  ATM multiservice switch revenue jumped a surprising 12% in 2Q08,
    driven by mobile backhaul investments, but are down 12% year-over-year
    

Infonetics' report provides market share, market size, forecasts, and port details for IP core and edge routers, carrier Ethernet switches (CES), and multiservice ATM switches. The report also tracks IP edge routers and CES by application (multiservice edge, BRAS, Ethernet access transport, and Ethernet services edge).

The report tracks Alcatel-Lucent, Ciena, Cisco, ECI, Ericsson, Extreme, Foundry, Fujitsu, Hitachi Cable, Huawei, Juniper, NEC, Nokia Siemens, Nortel, Redback, Tellabs, and others.

For report highlights, log in to Infonetics' online portal from www.infonetics.com (see Metro Ethernet, Routing, and Switching). For sales, contact Larry Howard, vice president, at larry@infonetics.com or +1 (408) 583-3335.

Infonetics Research (www.infonetics.com) is an international market research and consulting firm serving the communications industry since 1990. A leader in defining and tracking emerging and established technologies in all world regions, Infonetics helps clients plan, strategize, and compete more effectively.