IP router and carrier Ethernet switch sales down 5% in 1Q07

Market Wire, May, 2007

All segments in the service provider router and switch market were down in the first quarter of 2007, bringing the overall market down 5% from the previous quarter to $2.5 billion, according to Infonetics Research's quarterly report, "Service Provider Routers and Switches: IP, Ethernet, and ATM."

Despite the down quarter, IP core and edge routers and carrier Ethernet switches (CES) are expected to post strong growth over the next few years. Meanwhile, multiservice ATM and enterprise-class Ethernet switch sales continue to decline rapidly. Fueled by demand for IP router and CES, the overall router and switch market will grow from $9.6 billion in 2006 to nearly $13 billion in 2010.

"A couple of key factors are driving growth in the service provider router and switch market. First, there is a flurry of IP network transformation projects initiated by carriers around the world that include data network convergence, broadband network transformation, Ethernet growth, a broadening of private IP/VPN offerings, mobile data traffic aggregation, and a ramp up in IP/MPLS buildouts. And second, we have unstoppable traffic growth -- consumer broadband traffic, corporate data traffic, voice and mobile data traffic, and soon, IPTV and IP video traffic," said Michael Howard, co-founder of Infonetics Research.

Market Highlights

--  The overall service provider router and switch market is down for the
    quarter but up 10% for the year, from 1Q06 to 1Q07
--  ATM switch down 34% 1Q06 to 1Q07, down 2% from 4Q06
--  Service providers will spend a cumulative $56.4 billion worldwide on
    service provider switches and IP core and edge routers from 2006 to 2010
--  Carrier Ethernet switch sales were way down quarter-over-quarter but
    are up 13% year-over-year, from 1Q06 to 1Q07
--  Cisco continues to lead in the fast-growing carrier Ethernet switch
    market, with 63% worldwide revenue share in 1Q07, followed by Huawei,
    Siemens, and Nortel
--  In the service provider core and edge router market, Cisco leads with
    49%, followed by Juniper and then Alcatel-Lucent
--  Multiservice ATM switch revenue dropped from close to $5 billion in
    2000 to just over $1.3 billion in 2006
    

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

The report tracks Alcatel-Lucent, Avici, Ciena, Cisco, Ericsson/Marconi, Fujitsu, Huawei, Juniper, NEC, Nortel, Redback, Tellabs, ZTE, and others.

Download sample data at www.info.infonetics.com . For sales, contact Larry Howard, vice president, at larry@infonetics.com or 1 (408) 583-3335.

Infonetics ( www.infonetics.com ) is an international market research and consulting firm specializing in data networking and telecom. Services include quarterly market share and forecasting, end-user survey research, and service provider survey research and capex analysis.

Press Contact: Michael Howard Principal Analyst, Co-Founder Infonetics Research (408) 583-3351 Email Contact