Cisco grows at Huawei's expense in carrier routers
IP giant expands its lead on strength of refreshed ASR 9000, but other top five vendors feel carrier spending pinch
Published: 24 November, 2011
READ MORE: Metrics | Cisco Systems | Core Network
Cisco may already be seeing results from its ongoing reorganization, which aims to refocus on its core strengths, such as IP routers. In the third quarter, it was the only top five carrier switch/router supplier to see a revenue increase on Q2.
Cisco's revenues from carrier routers and switches rose 3% in Q3 to $1.43bn, while its nearest rivals - Alcatel-Lucent, Huawei, Juniper and ZTE - all saw double-digit percentage declines.
The IP giant also increased its lead over its competitors in the important IP Edge segment (edge routers and Carrier Ethernet switches), which now makes up 79% of the total. Cisco grew its lead to over 36%, according to the report from Infonetics Research, on the back of its recently upgraded ASR 9000 router and Ethernet switch family. Other smaller players which reported sequential gains in the IP edge were Alaxala, Ericsson, NEC, and Nokia Siemens, indicating that the growth of this subsector is paving the way for a realignment of the challengers to Cisco.
Michael Howard, principal analyst for carrier networks at Infonetics, commented: "Cisco's share gain is at the expense of its top competitors, particularly Huawei. With Huawei posting the largest sequential drop in IP edge market share in 3Q11, from 17.2% to 12.3%, Cisco's IP edge share now nearly triples Huawei's."
Overall the segment - which includes the IP Edge products plus core routers - declined by 7.1% sequentially to $3.5bn, though this was a slower decline than the 14% seen between the first and second quarters this year. The steepest decline in Q3 was in north America, which posted a 15% sequential decline, followed by EMEA and Asia-Pacific, on 6% each. CALA was the only major region to increase its spending. On a year-on-year basis, the total market grew by 4.5%.
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