One IP routing vendor's gain is another's decline--a theme clearly evident in Infonetics' Q3 2011 "Service Provider Routers and Switches" vendor market share report.
Out of the top five vendors, Cisco (Nasdaq: CSCO), which is in the process of a major company reorganization, was the only one that actually saw its router and switch revenue in Q3 increase, rising 3 percent sequentially to $1.43 billion. Following Cisco's lead, Alaxala, Ericsson (Nasdaq: ERIC), NEC, and Nokia Siemens also reported they saw a gain in the IP edge segment in Q3 2011 over Q2 2011.
Other competitors such as Alcatel-Lucent (NYSE: ALU), Huawei, Juniper (NYSE: JNPR) and ZTE (Shenzhen: 000063.SZ) all saw double-digit percent declines in their carrier router and switch revenue during the quarter.
"In the critical IP Edge segment (edge routers and carrier Ethernet switches), which now makes up 79% of the carrier router and switch market, Cisco expanded its lead to 36.2% on the strength of its recently refreshed carrier Ethernet switch portfolio and its ASR 9000," said Michael Howard, principal analyst for carrier networks at Infonetics Research. "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."
From an overall market segment standpoint, the global service provider router and switch market, a segment that includes IP edge routers, IP core routers, and carrier Ethernet switches (CES), declined 7.1 percent sequentially to $3.5 billion, lower than the 14.3 percent increase seen in Q2 2011. However, on a year-over-year basis, the carrier router and switch market rose 4.5 percent.
While many industry watchers have continued to cite concern over what effect the troubled European economy will have on future carrier spending in the remainder of 2011 and into 2012, North America reported the steepest quarterly decline in carrier router and switch revenue of 15 percent.
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