Carrier Switch and Router Market Bounces off the Bottom with a 7% Gain in 2Q09

Service providers spent US$2.77 billion worldwide on IP core and edge routers, carrier Ethernet switches, and multiservice ATM switches during Q2 2009 - a 7% sequential increase, reports Infonetics Research.

"Service providers increased their investments in edge and core routers in 2Q09, showing 13% edge and 4% core upticks, which we think will turn into a backend loaded 2009. Of course, we're not out of the woods yet. Year-over-year the carrier router and switch markets are still down considerably. But the overall bump in the market may indicate a bounce off the bottom, at least for 2009. The main drivers for this market are still there: Carriers continue to transform their networks from TDM to packet IP to handle the fast-growing Internet, mobile, data, broadband, and video traffic," explains Michael Howard, co-founder and principal analyst for carrier and data center networks at Infonetics Research.

The report also noted that worldwide CES revenue decreased slightly in 2Q09, and is still down significantly year-over-year, although it is expected to pick up over the next 4 quarters. The worldwide multiservice ATM switch market appears to have had its "last hurrah" in the last quarter of 2008, with steady decreases since then and severe year-over-year decreases

Cisco increased its worldwide IP edge router revenue share by 1.5 percentage points in 2Q09. Although all the major vendors increased revenue quarter-over-quarter, Alcatel-Lucent, Juniper, Huawei, and Redback all lost share, while Tellabs bumped up 2.3%

Posted to the site on 21st August 2009