High-End Router Market Experiencing Strong Growth as Cisco Takes Top Spot, Synergy Reports

The high-end router market - made up of the routers that the service providers themselves are using - grew 27 percent, year-over-year, according to the latest report from Synergy Research Group, with Cisco (News - Alert) taking the top spot in market share.

In its study of carrier infrastructure market shares for the first quarter of 2010, the research firm says the growth was driven by continued investment in next generation consumer services as well as service providers reacting to the burden of video running their networks hot.

Latin America, North America and emerging regions experienced the strongest growth, with respective year-over-year gains of 50 percent, 37 percent and 36 percent.

During the first quarter, service provider routers and carrier Ethernet enjoyed record growth as service providers and operators are optimizing and building out their networks to support the explosion of video on fixed and mobile networks, Synergy (News - Alert) reports.

IP mobile backhaul was one of the largest and fastest growth areas, posting numbers in the first quarter that exceeded spending for the entire previous year. While video is getting most of the attention, other strong market drivers include data centers and managed services.

Synergy Research spokesperson Heather Gallo said that these routers are not the ones used by offices or homes, nor the enterprise market, but are the ones used by telecom companies and Internet providers. They typically are priced over $200,000, she added.

The report also listed the top six rankings for market share and their percent changes from the fourth quarter of 2009 to the first quarter of 2010 for worldwide carrier infrastructure - Carrier Ethernet, IP, and MPLS. They are:

--Cisco  +7.26
--Juniper 2   -0.49
--Alcatel-Lucent   -3.10
--Huawei 4   -0.83
--Ericsson 5   -2.45
--Tellabs (News - Alert) 6   -0.03

'Most of the carrier infrastructure spending we are seeing remains conservative and is a reaction to the explosion of video on IP networks,' said Jeremy Duke, principal analyst and founder, Synergy Research Group. 'We believe the market momentum we have measured this quarter is just the tip of the iceberg, when carriers and operators begin to monetize their network assets and capabilities we will see an even higher level of growth.'

Synergy also reported that when looking at annualized market shares they see Juniper and Alcatel-Lucent (News - Alert) experiencing "good momentum." In the Ethernet services edge router market, Juniper picked up nearly 3 market share points. Alcatel-Lucent gained over 2 market share points for the overall carrier infrastructure market.

In a related matter, Cisco recently announced it plans to acquire CoreOptics (News - Alert) Inc, a privately held company specializing in the design of digital signal processing solutions for high speed optical networking applications.