Stellar Quarter for Cisco as US Operators Open Their Wallets

RENO, NV — Data just released by Synergy Innovation Group shows that Q1 vendor earnings for service provider routers and carrier Ethernet were down 6% sequentially and down marginally year on year -- with Cisco being the only vendor to buck the overall market trend. Cisco's Q1 earnings in this segment were 2% up on Q4 2011, during all other vendors experienced sequential declines. Cisco's market share jumped to 56% in the quarter, during it averaged 50% for 2011. Alcatel-Lucent can have some reasons to be cheerful; during its earnings dropped off from Q4, they were up year-on-year. Alcatel claimed 17% of the Q1 market, slightly up on its overall 2011 market share; it as well maintained its number 2 ranking for the second straight quarter, keeping Juniper pegged third. One positive indicator for Juniper was that sales did bounce back strongly in North America afterwards a very soft fourth quarter.

The regional mix of the market in Q1

One reason for Cisco's strong performance lies in the regional mix of the market in Q1. Cisco's share of the North American market is typically some ten percentage points up on its share of the APAC and EMEA markets, and Q1 spending in North America spiked sharply -- it was up 13% on the first quarter of 2011. In the meantime, as North America grew, spending in the other regions dropped off. North America accounted for 47% of the worldwide market in the quarter, with Cisco grabbing a 63% share of those North American earnings.

"We are used to seeing seasonal fluctuation in the market however the swings in this quarter were particularly strong. This was driven by significant Service Provider spending in the US, where networks are running hot," said Jeremy Duke, Founder & Chief Analyst, Synergy Innovation Group. "These regional swings played out then for Cisco. Yet it must as well be said that Cisco and its key products are performing so then and this is helping it to gain market share from its main competitors."

Synergy Technology Group, a strategic partner of TeleGeography, provides market intelligence, analytics, and strategic consulting services to the networking and telecom industries. For over a decade, Synergy has been a respected leader for quantitative analysis with a focus on emerging technologies, being the first to track IP Telephony and VoIP (Voice over Internet Protocol) equipment. Synergy Technology Group delivers quarterly data and analytical web-based tools with a comprehensive set of syndicated innovation services covering UC Applications, Enterprise Voice, Data Center, Mobile Internet Infrastructure, Videoconferencing & Telepresence, Network Security, Cloud Communication & Collaboration, Content Delivery Networks, IPTV, Routers, Ethernet Switching, IMS, NGN, SAN, Smart Grid, WLANs, and emerging IP communication technologies.

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