Edge and core routers to generate $8.4 bln by 2009

Driven by demand for new business VPN services, upcoming consumer triple-play services, and evolution to converged networks, the combined edge and core router market's sales are forecast to grow from $3.8 bln in 2004 to about $8.4 bln in 2009, according to In-Stat. Core router sales will grow at a stronger rate than edge router sales over the next five years, the high-tech market research firm says. Most major carriers plan to migrate from their existing multiple networks for different services to a converged MPLS core network that carries multiple types of traffic such as Layer 2 (Frame Relay, ATM, Ethernet), IP, and voice traffic. This trend will spur sales of core routers.

Worldwide edge router sales grew by 37% in 2004 from 2003 to $2.1 bln. Worldwide core router sales grew by 30% in 2004 to $1.7 bln. Cisco remained the dominant vendor in edge and core router sales in 2004, and Juniper was the second-leading vendor in both markets. The number of edge router vendors has increased substantially, and this is creating a much more competitive market.