Research firm echoes Juniper router gain

Another market research firm has found that Juniper Networks Inc. increased its revenue share of the router market by seven percentage points in the fourth quarter of 2002.

Infonetics Research Inc. this month released figures that show that Juniper gained market share in the IP core router market for the first time since the fourth quarter of 2000, grabbing 23 per cent of revenue, up from 16 per cent in the third quarter of 2002. This concurs with recent finding from Synergy Research and Dell’Oro Group Inc. that Juniper increased revenue share by seven percentage points in the fourth quarter while Cisco Systems Inc. lost an identical amount.

Juniper’s momentum is attributable to its T640 core router, which began shipping last year. Meanwhile, Cisco’s 12416 Internet core router is two years old, and the industry is awaiting Cisco’s response to the T640.

Worldwide revenue for service provider edge routers and switches, meanwhile, is up five per cent, to US$1.2 billion in the fourth quarter from the third, Infonetics found. But it is down overall for 2002 at US$5.3 billion, a 37 per cent decrease from 2001.

The five per cent increase in the fourth quarter was driven by further investments in multiservice switches as service providers spent the remainder of their 2002 budgets, according to Infonetics.

Multiservice switches had a better fourth quarter than routers, as both the edge and core markets saw double-digit growth while router categories declined. Brampton, Ont.-based Nortel Networks led the forth quarter revenue market share for total multiservice switches – edge and core – with 28 per cent; Lucent Technologies Inc., Alcatel SA, and Cisco follow with 23 per cent, 22 per cent, and 21 per cent, respectively, according to Infonetics.

The service provider router and switch market should grow between 19 per cent and 25 per cent from 2004 to 2006 as capex shifts to more data gear, Infonetics predicts. The firm expects the market to reach US$10.5 billion in 2006.

In optical, worldwide hardware revenue increased to US$2.24 billion in the fourth quarter, which was up slightly from the third quarter for a full year total of US$9.82 billion, according to Infonetics. Many major manufacturers posted increases over the third quarter, including Alcatel, Ciena Corp., Cisco, Huawei, Nortel Networks Corp., Siemens AG and Tellabs Inc., Infonetics found.

“Intelligent” optical hardware – data-aware equipment with remote configuration and remote service provisioning that can be deployed in mesh, star and ring topologies – is up six per cent from last quarter at US$1.71 billion, while legacy gear is down 15 per cent to US$528 million. Intelligent optical hardware makes up 76 per cent of all optical hardware revenue in the fourth quarter, Infonetics says.

Legacy will decline to 18 per cent of the total in 2003, and to 2 per cent in 2006, the firm predicts.

Five manufacturers account for 57 per cent of revenue market share for total optical hardware, including submarine. Alcatel leads with 15 per cent, followed by Nortel, Fujitsu, Siemens and Lucent.

SONET/SDH accounts for 69 per cent of total spending, outpacing WDM at 30 per cent. Top categories overall in terms of spending are metro SONET/SDH, at 57 per cent; and long haul WDM, at 22 per cent.

The next-generation voice market continues to take baby steps. Worldwide revenue reached US$191 million in the fourth quarter, a 15 per cent increase from the third, totalling US$1.2 billion in 2002, Infonetics found.

Until more media gateways and call control softswitches are deployed for voice over packet networks, many of the next-generation voice product segments that are focused on new packet telephony-based services will remain small, the firm said. The complete migration from circuit to packet for Class 5 switches will take over 10 years, according to Infonetics.

The market will grow at a compound annual growth rate of 40 per cent to reach US$4.6 billion by 2006, the firm predicts.

Worldwide next-generation softswitch revenue reached US$58 million in the fourth quarter, a 17 per cent increase over the third. “Tremendous” growth is expected long term, with 2006 reaching US$1.72 billion, the firm predicts.

Class 5 packet switches totalled US$5.9 million in the fourth quarter, a 57 per cent increase from the third. The remote access concentrator VoIP gateway heavyweights, Cisco and Lucent, increased their revenue share of the market to 83 per cent in 2002, Infonetics found.