Cisco takes back IP edge router market share lead in Q3

Huawei is taking a beating in the IP edge router market, losing double-digit share, new research shows. But they're not alone: Alcatel-Lucent (NYSE: ALU), Juniper Networks (Nasdaq: JNPR) and ZTE also saw their share of the market drop. The only winner among the top-five companies in the segment: Cisco (Nasdaq: CSCO).

Infonetics Research, in its Service Provider Router and Switches third quarter report last week said that Cisco bucked an industry trend in carrier router and switch revenue market share.

"Of the top five vendors, only Cisco increased its overall carrier router and switch revenue in the third quarter of 2011, up 3 percent from the previous quarter to $1.43 billion," said analyst Michael Howard. "Since Alcatel-Lucent, Huawei, Juniper and ZTE all saw double-digit percent declines in their carrier router and switch revenue in the same period. Cisco rises back up to over 40 percent market share for the first time this year."

Cisco made hay, Howard said, from its moves to refresh its Ethernet switch portfolio.

"In the critical IP Edge segment (edge routers and carrier Ethernet switches), which now makes up 79 percent of the carrier router and switch market, Cisco expanded its lead to 36.2 percent on the strength of its recently refreshed carrier Ethernet switch portfolio and its ASR 9000," Howard said. "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 the third quarter of 2011, from 17.2 percent to 12.3 percent, Cisco's IP edge share now nearly triples Huawei's."

Infonetics also reports:

• The global service provider, router and switch market, which includes IP edge routers, IP core routers, and carrier Ethernet switches (CES), is down 7.1 percent sequentially to $3.5 billion, following a 14.3 percent increase to $3.8 billion the previous quarter;
• Year-over-year, the carrier router and switch market is up 4.5 percent;
• In the third quarter of 2011, the IP edge segment (IP edge routers and CES), is down 6.7 percent sequentially but up 4.3 percent from the year-ago third quarter
• Top vendors posted gains in the IP edge segment in the third quarter of 2011 over the previous quarter: Alaxala, Cisco, Ericsson, NEC, and Nokia Siemens
• Regionally, North America lead the downward trend in the third quarter of 2011, with the largest decline in carrier router and switch revenue (down 15 percent from last quarter), despite all the concerns about the Euro zone
• The EMEA and Asia-Pacific regions each posted 6 percent declines, while Central and Latin America (CALA) was the only region that posted an increase, which was led by Brazil

In the second quarter, meanwhile, Cisco saw its competitors, including Huawei, Alcatel-Lucent and others, gnaw away at its share. Infonetics said Huawei's IP edge revenue grew 66 percent, while Alcatel-Lucent's increased 22 percent. Infonetics said the end-to-end portfolios and mobile backhaul emphasis that some companies have may be helping them versus Cisco.

Infonetics said the total service provider router and switch market grew 14 percent sequentially to $3.8 billion worldwide during the second quarter. Year-over-year, the market's increased measured out at 19 percent. The IP edge portion of that market jumped 15 percent overall sequentially in the second quarter and 21 percent year-over-year.

For more:
- see this release
- see FierceTelecom's take

Related articles:
HP, Cisco battle prompts drop in Ethernet switch revenues
Infonetics: Competitors squeezing IP edge market share from Cisco
Q1 report: Cisco continues to lose switching share