Gartner Says Worldwide Service Provider Router Revenue Increased 6 Percent in the Second Quarter of 2003.

Business Editors

STAMFORD, Conn.--(BUSINESS WIRE)--Aug. 14, 2003

The worldwide service provider router (SPR) market totaled $455.4 million in revenue in the second quarter of 2003, a 6 percent increase from the first quarter of 2003, according to Gartner, Inc. (NYSE: IT and ITB). This marks the first quarter of growth in the worldwide SPR market since declines began a year ago, and the positive results are consistent with the expectation that the SPR market is positioning itself for a recovery in 2004.

"Both Cisco and Juniper reported strong sales in high-end routers and gained revenue from North American and European service providers, which indicates recovery as they begin to build out their backbone networks," said Jennifer Liscom, principal analyst for Gartner's worldwide Telecommunications and Networking group.

Cisco Systems continued to lead the worldwide SPR market in the second quarter of 2003, claiming 54.6 percent of worldwide SPR revenue (see Table 1) and 52.9 percent of shipments (see Table 2). Nortel boosted its revenue almost 80 percent with large shipments to China and took over the third-place spot from Redback. Redback had an unusually weak quarter; however the financial restructuring that was completed during the quarter should work to increase customer confidence.

Table 1
Worldwide Service Provider Router Vendor Revenue Estimates for 2Q03
(Millions of Dollars)

Vendor          2Q03 Vendor Revenue  2Q03 Market Share (%)
----------------------------------------------------------
Cisco                    248.7                       54.6
Juniper                  136.0                       29.9
Nortel                    20.5                        4.5
Redback                   16.7                        3.7
Others                    33.5                        7.4
Total                    455.4                      100.0
----------------------------------------------------------
Source: Gartner Dataquest (August 2003)

"Although Cisco is continuing to dominate the market, Juniper, the No. 2 vendor in revenue and shipments, also continues to perform well," Liscom said. "Higher-end systems sales coupled with higher-end card interface revenue contributed to an increase in average selling price for the quarter."

Table 2
Worldwide Service Provider Router Vendors' Shipments Estimates for
2Q03
(Units)

Vendor              2Q03 Shipments   2Q03 Market Share (%)
----------------------------------------------------------
Cisco                       1,659                    52.9
Juniper                       944                    30.1
Nortel                        127                     4.0
Redback                       120                     3.8
Others                        286                     9.1
Total                       3,136                   100.0
----------------------------------------------------------
Source: Gartner Dataquest (August 2003)

Gartner defines SPRs as carrier-class routers capable of providing multigigabit bandwidth in support of high-speed WAN interfaces. These carrier-class devices are typically designed for installation in network infrastructure and support the Internet Protocol suite.

Additional market information for the SPR market is available in the Gartner Dataquest Market Statistics report "Worldwide Service Provider Router Market Shares, 2Q03." This report provides a breakout by region and function, and can be purchased on Gartner's Web site at www.gartner.com.

This analysis is provided by Gartner's worldwide Telecommunications and Networking group. This group provides an analysis for the full spectrum of telecom and networking issues. To keep up to date on the latest telecommunications issues, please visit Gartner's Telecommunications Focus Area at www.gartner.com/telecom-mkt. To purchase a report or subscribe to Gartner programs, call 408-468-8000 or go to www.gartner.com.

About Gartner

Gartner, Inc. is a research and advisory firm that helps more than 10,000 clients leverage technology to achieve business success. Gartner's businesses are Research, Consulting, Measurement, Events and Executive Programs. Founded in 1979, Gartner is headquartered in Stamford, Conn., and has more than 3,800 associates, including approximately 1,000 research analysts and consultants, in more than 75 locations worldwide. Revenue for calendar year 2002 totaled $888 million. For more information, visit www.gartner.com.