Formerly High-Flying Carrier Ethernet Switch/Router Market Declines 4% Sequentially in 3Q08, Heavy Reading Reports

Dec 29, 2008

Cisco, Alcatel-Lucent, Extreme, and Foundry Hold Top Four Positions in Increasingly Competitive Market

NEW YORK, Dec. 29 /PRNewswire/ -- Worldwide sales of carrier Ethernet switch/routers (CESRs) fell 4% quarter-over-quarter but rose 8% year-over-year in the third quarter of 2008 to $538 million, according to the Carrier Ethernet Switch/Router Quarterly Market Tracker service published by Heavy Reading (, the market research division of TechWeb's Light Reading (

"While the fundamental business drivers for longer-term CESR growth remain solid, the average CESR revenue per vendor and per customer declined to its lowest level in the past two years during 3Q08," said Stan Hubbard, Senior Analyst for Heavy Reading and author of the CESR Quarterly Market Tracker.

"Macroeconomic weakness has already started to take some wind out of the market, but we have yet to see the full impact of more conservative spending on the part of operators that face uncertainty regarding access to capital and a slowdown in business, consumer, and wholesale sales," said Hubbard. "Ethernet-based services undoubtedly will hold up better than most other communications services during the global recession due to their performance-price advantages compared to legacy solutions, but Ethernet services growth rates will be more modest, and that will translate into some delayed sales of carrier Ethernet platforms."

Heavy Reading now estimates the global CESR market will have a compound annual growth rate (CAGR) of 11% between 2007 and 2012, reaching $3.2B at the end of this period.

"Macroeconomic weakness is not the only factor impacting the market," notes Hubbard. "Competition continues to heat up, with an estimated 18 suppliers generating revenue from CESR equipment in 3Q08. That number is likely to increase with new entrants in 2009."

Heavy Reading estimates that market leader Cisco regained one share point in 3Q08, as its sales declined less than the overall market did in the quarter. Alcatel-Lucent's No. 2 position remained unchallenged in the quarter. Extreme edged out Foundry for the No. 3 slot with the help of strong international sales.

Heavy Reading's Carrier Ethernet Switch/Router Quarterly Market Tracker delivers a complete accounting of telecom equipment manufacturer revenues in CESR sector, including quarter-by-quarter revenue and market share breakouts for each supplier, sales by geographic region and application, and revenue projections through 2012 by region and application. The quarterly tracking service also analyzes each vendor's market strategy and identifies and analyzes customer wins, providing granular insight into this emerging market sector unavailable from other sources. It provides a comprehensive list of more than 275 operators and other entities around the world that have purchased CESR platforms.

The Heavy Reading report analyzes 16 vendors that are now generating sales from CESR products or could be in a position to roll out CESR products within the next 12 months. Equipment vendors examined include Alcatel-Lucent, ANDA Networks, Ciena, Corrigent, Cisco Systems, ECI Telecom, Ericsson, Extreme Networks, Foundry Networks, Hitachi Cable, Huawei Technologies, Juniper Networks, MRV Communications, Nokia Siemens Networks, Nortel Networks, and Tejas Networks.

The Carrier Ethernet Switch/Router Quarterly Market Tracker is distributed in PowerPoint and Excel formats. Quarterly reports may be purchased individually or as part of an annual subscription service.

For more information, or to receive a free PowerPoint demo of the Carrier Ethernet Switch/Router Quarterly Market Tracker, please contact:

    Dave Williams
    Sales Director, Heavy Reading

    Press/analyst contact:
    Dennis Mendyk
    Managing Director, Heavy Reading

About Heavy Reading

Heavy Reading is an independent market research organization offering quantitative analysis of telecom technology to service providers, vendors, and investors. Its mandate is to provide the comprehensive competitive analysis needed today for the deployment of profitable networks based on next-generation hardware and software.

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SOURCE: Heavy Reading

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