- Global router market rebounds with 10% YoY growth, said Dell’Oro
- Huawei, Juniper and Nokia lead the charge
- Cisco revenue declined but the vendor is doubling down on routed optical networking
After nearly two years of bad beats, high-end routers are seeing light at the end of the tunnel. Dell’Oro reported the market performed above expectations in Q1, with revenue jumping 10% year-on-year.
“The only factor I can attribute to the better-than-expected results in the quarter is that the inventory correction is now complete, and customers have resumed ordering routers,” said Dell’Oro analyst Jimmy Yu, who noted demand was widely spread across regions and customers.
Indeed, routers are following the same route as the optical transport market, which also faced issues with heavy inventory backlog post-Covid but is now on the comeback.
Huawei came out on top with a 23% increase in router revenue, Dell’Oro said, followed by Juniper (16%) and Nokia (14%). The Chinese equipment vendor’s gains come as no surprise. Despite Western sanctions, Huawei has done well for itself even when the rest of the global telco equipment space was down bad.
Nokia, which has pivoted its focus from telcos to the cloud, was recently tapped by CoreSite to provide IP routing-based edge and core network connectivity across 30 CoreSite data centers.
And Juniper, whose merger with HPE still remains under federal scrutiny, touted gains in wide area networking as well as in its Campus and Branch and data center segments in Q1.
Cisco, on the other hand, saw overall router revenue decline from last year, Dell'Oro said. Nevertheless, the vendor is making inroads with core routers – especially with IP over DWDM technology – Yu told Fierce.
IP over DWDM, which Cisco refers to as routed optical networking, integrates IP routers and switches directly into optical transport networks via pluggable transceivers.
“The company has its own 400 ZR/ZR+ optical plugs to sell with their routers and directly to end users,” said Yu. “[IP over DWDM] using ZR optics is gaining momentum right now, with hyperscale companies utilizing it as a data center interconnect solution.”
The router market isn’t out of the woods quite yet. Dell’Oro cautioned “market uncertainty remains elevated due to U.S. government initiatives that may increase costs and slow economic growth.”
What will happen with the Trump administration’s tariffs is still anyone’s guess. But as we’ve previously reported, reciprocal tariffs on China and other countries could have a back-breaking effect on the telecom supply chain.