I love studies, however this one does not seem reflective of what is going on currently at Newbridge... for what it is worth (imho not much)
Study says U.S. giants pose formidable threat
Bert Hill
The Ottawa Citizen
Newbridge Networks and Nortel Networks face tough challenges competing in
the booming market for high-speed telecommunications gear, according to the
author of a new market study.
Joe Skorupa, an analyst with the RHK telecommunications research firm of
South San Francisco, California, said yesterday that Newbridge is losing ground
in markets it used to lead, while Nortel has yet to prove that its new products can
prevail.
A Newbridge spokesman said the study covers a broader range of
telecommunications products than Newbridge competes in, making comparisons
difficult.
Greg Merritt, a Nortel marketing vice-president, questioned the study, saying that
other analysts reports put Nortel in first place in key switch products.
"We are not seeing any slowdown with our products and we expect to pick up
business considerably as our new products redefine the market."
Mr. Skorupa said both Nortel and Newbridge have a chance to get back into the
race because the market of $1.44 billion U.S. in the first six months of the year is
growing at more than 200 per cent annually and customers are desperate for
equipment to handle telecommunications traffic.
With major traditional suppliers and start-up competitors preparing new
products, RHK said, "the second half of the year promises a very different
picture."
But he said Nortel and Newbridge face hurdles in convincing major telephone
companies and corporations to replace the systems familiar to them.
"At this moment, they are just not in the race in many markets."
The study looked at the market for high-capacity switches and routers used to
gather and distributed telecommunications traffic to and from major clients. In
this so-called "edge" market, Cisco Systems and Lucent Technologies had big
leads in units sold in the first six months of the year with 36 per cent of the
market each.
Nortel was third with 14 per cent of the market volume and Newbridge was
fourth with 10 per cent.
In terms of revenues, Newbridge was a respectable third just behind Cisco and
Lucent.
Despite the apparent promising evidence that Newbridge is extracting more
revenue from each sale than competitors, the report said Newbridge's "influence
in the overall market is waning."
Newbridge has traditionally been a big player in the switch market but does not
competed in routers.
Mr. Skorupa said niche players like Newbridge will find it harder to maintain a
profitable place in the market.
He said Newbridge efforts to reposition older products are working more
successfully in international markets than the U.S. In one case, he said US West,
a major local phone system, had replaced Newbridge equipment with Cisco
equipment.
A study by RHK of the market for much bigger switches that control huge
transcontinental pipes for telecommunications traffic, found that Ascend, a
Lucent acquisition, led the market and Cisco had moved into second place,
largely at the expense of Newbridge.
Nortel was a distant fourth.
Mr. Skorupa said the new Optera switches Nortel unveiled last week "are a clear
signal that Nortel is counting on these products to attack the market with a
vengeance."
Market Share
Revenue - Units
Cisco - 31% - 36%
Lucent - 28 - 36
Newbridge - 26 - 10
Nortel - 12 - 14
Fore - 3 - 4
Source: RHK research study of edge router and switch telecommunications
market for first half of 1999 |
