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Enterprise router market totals $3.5 bn in 2012: Infonetics

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Deepa
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BANGALORE, INDIA: Global enterprise router market totaled $3.5 billion in 2012, down three per cent from 2011, better than 2010 but a long way from the previous market high of $4.3 billion set in 2007. On the flip side, unit shipments for enterprise routers grew five per cent in 2012. Low-end routers made up all the revenue growth in 2012 (up 20 per cent), and now represent the largest segment in unit contributions, as per market research firm Infonetics Research.

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"Buyers are resorting to low-end routers at their branches rather than the more typical branch and mid-range routers, which resulted in a revenue decline for 2012," notes Matthias Machowinski, directing analyst for enterprise networks and video at Infonetics Research.

Mid-range router sales jumped eight per cent in 4Q12 from the previous quarter, possibly an early indicator of a turning point. One piece of good news: ASPs were very steady, falling less than one per cent in 2012, and in some cases growing. Infonetics forecasts the global enterprise router market to reach $5.0 billion by 2017, it adds.

"However," Machowinski adds, "With the rise in cloud services adoption, we don't think buyers are on a sustainable path with low-end routers at the branch, and we expect them to shift their spending back to branch and mid-range routers. Coupled with general economic growth, this should drive renewed revenue growth in 2013."

Though there was a wide range of router vendor performances in 2012, market share changes were very minor; #1 Cisco gained 0.2 per cent share to 71.5 per cent and the top revenue share gainers were Huawei, Yamaha, and NEC.

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