Week in research: Core router upgrades increase 11%; enterprise network equipment sales fall

Core routers angle upward: As adoption of 100 Gbps technologies increases, adoption of core routers capable of handling next generation speeds is on a growth path, according to Dell'Oro Group. The service providers core router market grew 11 percent year-over-year in the first quarter of 2011 and has shown five consecutive quarters of double-digit growth. "We are on the verge of a major shift in core router technologies and increased market competition," said Shin Umeda, Vice President at Dell'Oro Group. "All of the major vendors have introduced new high capacity and scalable systems, and we believe that service providers will be evaluating, testing, and eventually buying these products in the near future." Cisco (Nasdaq: CSCO), Juniper Networks (NYSE: JNPR) and Huawei make up the top three vendors in this market segment. News release

Fixed-line faces Latin America challenge: Mobile broadband is expanding quickly in the Latin American market, due in part to faster deployment into unserved or underserved areas, says Pyramid Research in a new report. However, the technology can't compete with the speed and reliability that fixed broadband connections offer. Still, the research firm says, there's no one-size-fits-all solution for fixed line operators in the region. "In addressing the threat from mobile services, wireline operators are prompted to use all their service differentiation possibilities--including pay-TV and high-speed Internet, including Fiber to the X (FTTX)--to prevent fixed-mobile migration," says Vinicius Caetano, Senior Analyst. "Meanwhile, it is important for fixed companies to focus on subscription revenue, not on revenue per use." News release

Home automation interest grows: While shipments of home automation equipment will total only 1.8 million in 2011, ABI Research is forecasting a sharp upswing in the next five years, to 12 million-plus shipments by 2016, driven by the availability of standards-based wireless or powerline technologies that reduce the cost and complexity of installing home automation devices. Zigbee remains the market leader in this area, but innovative applications like the Android@Home Framework (a middleware layer sitting on top of the Android OS) which enables control of consumer appliances via smartphone, and other similar products will pique consumer interest. News release

Network equipment dips: After a year of record-setting growth globally, the enterprise network equipment market dove downward 12 percent sequentially in Q1 2011, to $4.2 billion. Compared to the same quarter last  year, sales dipped 9 percent. The drop can partially be attributed to the "sun-setting stimulus programs" and the drying up of other government funds. "But not all segments are faring equally: wireless LAN equipment is proving resilient, with global revenue up 17 percent from this time last year," reports Matthias Machowinski, Infonetics Research's directing analyst for enterprise networks and video. News release

Infonetics vendor chart