<<Formerly High-Flying Carrier Ethernet Switch/Router Market Declines 4% Sequentially in 3Q08, Heavy Reading Reports
Monday, December 29, 2008 5:00 PM
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(Source: PRNewswire)trackingNEW 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 (http://www.heavyreading.com/), the market research division of TechWeb's Light Reading (http://www.lightreading.com/).
"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. >>
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