New Study by RHK Forecasts Core Switch & Router Market Will Reach $5.5 Billion by 2003; 1998 Core ATM Market Leaders: Ascend, Cisco and Newbridge
Business Wire - April 21, 1999 06:19
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SOUTH SAN FRANCISCO, Calif.--(BUSINESS WIRE)--April 21, 1999--The North American market for high-capacity core switches and routers will grow rapidly over the next 5 years as the public network shifts from a circuit-based, telephony-oriented model to a packet-based, data-centric infrastructure.
Telecom market research firm RHK today revealed that the market for core switches and routers will reach $5.5 billion by 2003. This market is being fueled by the unprecedented growth in data (Internet, private IP, Frame Relay) and telephony traffic, which is prompting service providers to rethink their network architectures and creating new opportunities for vendors with advanced IP, ATM and MPLS technologies.
Core Switch & Router Forecast (Revenues - $ Millions)
1998 $169
1999 $455
2000 $1,289
2001 $2,380
2002 $4,051
2003 $5,531
The new study, "Core Switching & Routing: Market Technology & Forecast," released as part of RHK's Core Switching & Routing service shows that the growth of the core switch and router market will continue as service providers deploy units to keep up with Internet traffic growth. In the early years (1999-2000) growth will result from:
-- Demand for higher-capacity routers
-- Demand for higher-speed interfaces
-- Deployment of OC-48 interfaces in 1999
-- Rapid deployment of DS3 and 0C-3 services to enterprise customers
-- DSL and cable modems
In the latter years (2001-2003) the market will increase due to
the following factors:
-- Substitution of core switches and routers for cell and circuit
switching equipment
-- More integration of SONET features
The study further addresses how network consolidation will shape the opportunity for new switches and routers. As service providers look to streamline their operations and economics, demand will shift from multiple OSI layers to a new era of multi-layer systems. This movement will prompt new entrants to enter the marketplace and vie for leadership positions.
"Although many believe that network traffic will eventually be consolidated onto a single IP-over-optics infrastructure, RHK argues that many service providers will find keeping two functionally different backbones -- one entirely IP-centric and the other based on ATM, will result in a more efficient network," remarks Joe Skorupa, director of RHK's Switching & Routing service.
The study also reveals the market share numbers for core ATM switches. Ascend Communications extended its market leadership position by capturing 33% of the market in 1998. Cisco increased its market share from 21% in the first half of the year to 24% for the year, overtaking Newbridge, who dropped from 26% in the first half to 24% for the year. FORE, NEC, Nortel and others made up the remaining 19% of the core ATM switch market.
"Core Switching & Routing: Market Technology & Forecasts," analyzes the factors shaping the emerging opportunities for high-capacity core switches and routers, forecasts the sales of core switches and routers by capacity ranges, and explores the market shares for ATM switches being used in the public network.
Ryan Hankin Kent, Inc., is a leading market research and consulting firm specializing in the analysis of advanced technologies for the public telecommunications network. The company provides subscription services and custom consulting to technology vendors, service providers and the investment community on North American and European markets.
RHK's areas of expertise include: WDM & Optical Networking, Optical Components, SONET/SDH, Loop Access Systems (IAPs, NGDLC, xDSL, HFC and FITL), Core/Edge Switching & Routing, Network Management, Cable Modems, Emerging Network Architectures, Systems for Voice over IP, Internet Video and other emerging technologies. RHK is based in South San Francisco. For complete service offerings, please contact Mike Mahan at 650/737-9600 ext. 233. For more information, visit the company's Web site at www.rhk.com
CONTACT: RHK (Ryan Hankin Kent, Inc.)
Lee Kurnoff, 650/737-9600
Lee_Kurnoff@rhk.com
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