Cisco Systems (Nasdaq: CSCO) and Juniper Networks (NYSE: JNPR) continued to lead the router market despite an industry-wide slowdown in the first quarter, according to a report from Dell'Oro Group.
Since the middle of 2011, which was the last time the market experienced "double digit growth," quarterly market revenue growth has been stagnant due to declines particularly in North America and Europe.
Shin Umeda, vice president at Dell'Oro, said that "Router investments in North America have softened as certain application deployments, such as mobile backhaul, have tapered," while "in Europe, continuing macroeconomic uncertainty has driven service providers to reduce their capital expenditures by 10 percent in the quarter, and consequently reduce their router deployments."
Cisco and Juniper, along with Alcatel-Lucent (NYSE: ALU), and Huawei Technologies, made up 94 percent of first quarter service provider revenue. Cisco remained in the lead for market share in the first quarter.
In Q1 2013, Cisco reported that while its bread-and-butter next-generation routing revenues remained flat, switching and service provider video revenues rose 2 and 30 percent to $3.6 billion and $1.3 billion, respectively. Juniper reported that service provider demand and deployment of its edge router platforms to support business and broadband services, drove up router revenue to $488.1 million.
Despite seeing some gains the United States and signs of improvement in EMEA, Juniper could face a challenging time as some of its largest customers, including AT&T (NYSE: T), reduced their capex forecast for 2014 and 2015.
- see the release
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