Router Market Recovering; Juniper Chips Away at Cisco
3/4/2004 -- Recent market research data suggests that Juniper Networks Inc. may be growing
its market share at the expense of Cisco Systems Inc. and other competitors.
Juniper’s surge corresponds with the first sustained growth in sales of
enterprise and carrier-class routers since the economic downturn of 2001.
Market research powerhouse Gartner Inc. reported earlier this week that Juniper
grew its market share in the high end carrier-class router space during the
fourth quarter of 2003, possibly at Cisco’s expense.
Juniper’s Q4 revenues were up by nearly 11 percent, from 24 percent to
26.6 percent. Conversely, market leader Cisco’s revenues slipped, from
59.4 percent to 57 percent – a decline of about 4 percent. Third place
belonged to Nortel Networks Ltd., which suffered the biggest overall decline,
its market share eroding by almost 19 percent, from 4.8 to 3.9 percent.
For the quarter, sales of carrier-class routers amounted to $673.7 million,
a 13 percent spike from Q3. This marks the third successive quarter in which
carrier-class router revenues have posted year-over-year and quarter-over-quarter
gains, dating back to Q2 of 2003. Service provider router sales bottomed out
in Q1 2003, dropping four percent from Q4 2002. Since then, however, the high-end
carrier space has rebounded strongly, posting six percent quarter-over-quarter
growth in Q2 and 19 percent in Q3.
For the record, Cisco recorded $384.1 million in carrier-class revenues during
the fourth quarter, Gartner said, which represents an 8 percent increase from
Q3. Juniper, for its part, grew its revenues by 25 percent, to $179.1 million.
Gartner’s report is the latest indication that there’s a recovery
afoot in the router space, especially in sales of high end routers. According
to a recent report from market research firm Dell’Oro Group, for example,
worldwide router sales increased by 3 percent last year to $6.3 billion. This
rebound marked the first annual sales growth in the router space since the onset
of an economic downturn in 2001, the market research firm said.
After a slow start, Dell’Oro Group found that sales of high end routers
took off in the second half of 2003, ultimately recording growth of 22 percent
for the year. At the same time, growth at the high-end was offset by a decline
in low-end, business-class router sales, which dropped by 5 percent.
Cisco retained its number one position in the Dell’Oro Group study, with
Juniper a distant second. At the same time, the research firm found that Cisco’s
revenues declined by 2 percent in 2003, while Juniper’s accelerated by