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Infonetic study finds new vendors eyeing Cisco’s margin-rich router business

Worldwide standard and secure enterprise router revenues hit US$4.3 billion and units reached 14.9 million in 2003,...


February 27, 2004  


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Worldwide standard and secure enterprise router revenues hit US$4.3 billion and units reached 14.9 million in 2003, with flat-to-low annual revenue and unit growth expected through 2007, according to Infonetics Research’s Enterprise Routers quarterly worldwide market share and forecast report.

Companies using secure routers for corporate-wide rollouts of broadband VPNs for telecommuters and remote offices are driving demand for secure routers, making that segment grow much faster than the standard router segment, the market research firm said.

The secure router segment grew to 13% of the total enterprise router market in 2003, and will increase to 16% by 2007.

“In a market this big, there are always a lot of opportunities, especially with certain segments taking off as secure routers are now,” said Infonetics Research’s Neil Osipuk, lead analyst of the report. “Cisco continues to lead this space by a long shot, but new vendors will no doubt try to challenge their dominant share.

“Cisco’s near monopoly of the enterprise router market has enabled them to dictate prices, but vendors entering and re-entering the market will likely launch a price war, which will give end-users and channels the alternative they’ve been looking for. These dynamics will shake up market share distribution over the next 12 to 15 months.”

The study found that:

* Cisco leads the total enterprise router market with 67% revenue and 8% unit market share;

* Linksys (acquired by Cisco but still reporting numbers separately) has 45% unit market share and 8% revenue market share, and

* ZyXel is the next closest competitor for unit market share with 17%;

Companies tracked included 3Com, ADTRAN, Alcatel, Allied Telesyn, Cisco, D-Link, Linksys, Lucent, Enterasys, Huawei, NETGEAR, Nortel, Tasman, Vanguard, ZyXEL, and others.

Further information is available at www.infonetics.com.