IP router sales to service providers still strong

Sales up 40 percent over the second quarter of 2007, with Cisco still in top spot.

IP routers used by network service providers sold well globally in the second quarter this year, with sales up 40 percent over the second quarter of 2007, and advancing 17 percent from the first quarter of 2008, according to Infonetics Research.

All told, service providers that route data, voice and video traffic via IP over a variety of networks to their end users spent US$2.6 billion globally in the second quarter. Half of the global market for IP routers was sold by Cisco Systems, which saw a 15 percent gain in IP service provider router revenue, Infonetics said in a statement.

IP router revenues have grown from 20 to 30 percent every year since 2003, a trend that Infonetics analyst Michael Howard said should continue through 2008. The reason for the growth is the expanding network traffic carried by the service providers and projects by carriers to implement all-IP networks, Howard said.

Howard warned, however, that spending on IP routers "has to slow or level out at some point." Capital expenditures by carriers are slowing globally, except in India and China, while many carriers are seeing only single-digit revenue growth each year, he noted.

While Cisco has held the top spot with more than half of the global market since 2005, there has been strong competition, Howard noted. In the second quarter, for example, Fujitsu showed the strongest gain, jumping from the ninth position a year earlier to the sixth spot. Huawei Technologies, Foundry Networks and NEC all had double digit gains in the second quarter, while the number two and three vendors, Juniper and Alcatel-Lucent, had single-digit revenue gains over the prior year, Infonetics reported.