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Router Market Stablizies, Cisco Continues to Dominate

Gartner said sales of service provider routers (SPR) slipped 4 percent in the first quarter, however analysts with the Stamford, Conn., research firm said the market for has stabilized.

SPR sales totaled $428.2 million during the first three months of 2003, down 4 percent from the last three months of 2002.

"(The decline) is probably because of economic conditions and uncertainty in the market because of the war in Iraq," said Jennifer Liscom, principal analyst for Gartner's worldwide telecommunications and networking group.

"The first quarter is typically a slow quarter for this market, but results from the past two quarters indicate that the market has stabilized," she added.

The market will likely change in the second half as newcomers Procket and Caspian Networks introduce products.

Procket said its offering, which is currently being field tested, boasts high capacities and lower power consumption that should save customers will save money over. The products also occupy less floor space.

Increased competition could bring prices down.

These startups will be looking to cut into Cisco's business, which continued to lead with SPR revenue of $236 million in the first quarter, good for 55 percent of the market. Gartner said. Juniper was second tallying $129 million, or 30 percent, with strong sales of its M- and E-series products.

Redback and Nortel followed with $24.7 million, or 5.8 percent, and Nortel with $11.5 million, or 2.7 percent. Other router makers combined for $27.6 million, or 6.4 percent marketshare.