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Secure Routers Go Through Ceiling In 2005

By John Stith

A new study from Infonetics Research reported big numbers for secure routers in 2005. While price pressure drove prices down along with overall revenues, the number of units moved climbed 121%.

According to Infonetics numbers, overall revenues were down 3% to 3.3 billion from 2004's $3.4 billion. They also said overall global demand remained strong, hitting a 14% year-over-year increase.

"Overall the enterprise router market had a good year," said Matthias Machowinski, directing analyst at Infonetics Research. "Though revenue didn't quite keep pace with unit shipments, demand is solid. The transition from standard to secure routers is speeding up, with secure router revenue skyrocketing and unit shipments practically tripling in the last year. The underlying fundamentals of the market are strong because companies continue to upgrade their networks and look for platforms that integrate security features, QoS, and support for VoIP."

Some market highlights included:

Though revenue was down a bit for the year, it was up for the quarter: worldwide enterprise router revenue increased 6% between 3Q05 and 4Q05, to $910 million

Worldwide secure router revenue jumped 121% between 2004 and 2005, from $363 million to over $803 million, and unit shipments nearly tripled

In 2005, Cisco lead the enterprise router market by a wide margin, capturing 81% of worldwide revenue share and 71% unit share

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Hauwei remains in second place for secure router unit shipment and revenue market share

Nortel maintains third position for worldwide enterprise router revenue share, a position it has held for six of the last eight quarters

Infonetics also put together their productions for the market in 2009. They predicted strong IP router and carrier Ethernet switch and router sales would kick up the worldwide service provider router and switch market to $10 billion in 2009, up from $7.2 billion in 2005.

"Service providers are clearly moving toward next gen IP networks, and Ethernet plays a strong growing role in that move. It is no surprise that carrier Ethernet switches and routers (CESR) show up big in 4Q05 in our new quarterly report. Providers need carrier-class products; eventually, nearly every service provider IP router will be designed to meet the specifications of CESR products," said Michael Howard, principal analyst at Infonetics.

Some highlights from those predictions include:

A total of $43.4 billion will be spent on service provider routers and switches worldwide during the five-year period between 2005 and 2009

Core and edge router sales jumped 31% between 2004 and 2005, from $4.0 billion to $5.2 billion

Multiservice switch revenue dropped 5% between 2004 and 2005, from $2.1 billion to $2.0 billion

Carrier Ethernet switch and router revenue totaled $617 million in the fourth quarter

Cisco maintains its strong lead in the service provider router market, with 42% revenue share in 2005, followed by Juniper with 19%, then Nortel and Alcatel

North America's share of the worldwide service provider router and switch market fell to 37% in 2005, from almost 60% in 2000

About the Author:
John Stith is a staff writer for WebProNews covering technology and business.

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