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Ovum-RHK: 3Q06 Rough for IP Equipment Vendors; Cisco Leads the Way

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Internet Phone - Callture Inc.

November 15, 2006

Ovum-RHK: 3Q06 Rough for IP Equipment Vendors; Cisco Leads the Way

By Mae Kowalke, TMCnet Associate Editor


During the third quarter of 2006, global sales of service provider packet-transport equipment grew to $2.3 billion, research firm and consultancy Ovum-RHK said Tuesday.
 
The growth represents a two percent increase over the previous quarter, and a nine percent increase from third quarter 2005.
 
Ovum-RHK broke the market down into segments to offer some additional perspective on how the increases were manifested. The tables below summarizes those findings.
 
Technology-focused Market Segments
Segment
3Q06 Sales
Percent Change From 3Q05
IP/MPLS core
$494 million
> 8
IP/MPLS edge
$1,043 million
> 31
ATM/MPLS
$362 million
< 24
IP/Ethernet
$416 million
> 6
 
Application-focused Market Segments
Segment
3Q06 Sales
Percent Change from 3Q05
IP Transport and Services
$802 million
> 11
Ethernet Transport and Services
$793 million
> 29
Legacy Transport and Services
$469 million
< 16
Subscriber Services/BRAS
$247 million
> 10 
 
As the tables show, and perhaps not too surprisingly, one of the two segments that experienced a decrease is sales was Legacy Transport and Services.
 
Also of note on the high end, IP transport/services and Ethernet both made very strong appearances, bringing in the first and second largest chunk of sales for the application-focused market segment. Clearly these technologies are hot stuff.
 
During the course of its research, Ovum-RHK also found that the IP transport and services market continue to be dominated by Cisco and Juniper—those companies held 60 percent and 22 percent of the market, respectively, for the third quarter of 2006.
 
The tables below summarize other market leadership findings.
 
Ethernet transport and services
Company
Percent Share
Cisco
67
Alcatel (News - Alert)
16
 
Subscriber services
Company
Percent Share
Cisco
43
Juniper
31
Redback
25
 
Legacy transport and services
Company
Percent Share
Nortel (News - Alert)
24
Alcatel
19
Cisco
17
Lucent
17
 
IP/MPLS core
Company
Percent Share
Cisco
62
Juniper
34 
 
IP/MPLS edge
Company
Percent Share
Cisco
52
Alcatel
17
Juniper
14
 
Combined IP/MPLS
platform revenues
Company
Percent Share
Cisco
56
Juiper
20
Alcatel
11
 
“With the exception of Cisco, who was buoyed by strong orders from China and India, 3Q06 was a challenging quarter for most equipment vendors,” said Mark Seery, Vice President of Ovum-RHK’s IP Service Infrastucture department, in a statement.
 
Seery added: “With some concerns entering 4Q06 about whether the usual end-of-year budget flush will happen, we are looking forward to the first half of 2007 for stronger growth as some major deployments in Asia and North America may start to grow spending.”
 
Mae Kowalke previously wrote for Cleveland Magazine in Ohio and The Burlington Free Press in Vermont. To see more of her articles, please visit Mae Kowalke’s columnist page. Also check out her Wireless Mobility blog.

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