The Service Provider Router & Carrier Ethernet Switch market contracted year-over-year to its lowest level in five years in the first quarter of 2018, according to a recently published report from Dell'Oro Group.
The quarterly contraction sets the stage for the first annual market decline since 2012 as telecom and cloud service providers reduce spending on IP infrastructure.
"Over the past two years, the Asia-Pacific region has been a major growth engine for the router market, but in 1Q18, driven in part by saturation in the China telecom market, router demand experienced a sharp decline," said Shin Umeda, Vice President at Dell'Oro Group. "The weaker China market, combined with price reductions and network architecture evolution in North America, gives us a recipe for a market pull-back in 2018," added Umeda.
Additional highlights from the 1Q18 Router & Carrier Ethernet Switch Quarterly Report:
- Despite the market's revenue contraction, 100 Gigabit Ethernet port shipments grew more than 35% year-over-year.
- Cisco was the top ranked vendor in 1Q18, followed by Huawei, Nokia, and Juniper. These four vendors accounted for more than 90 percent of the market revenue in 1Q18.
