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Cisco widens lead on Juniper

The network equipment giant grabs 65 percent of the $567 million high-end router market in the third quarter, up from 60 percent in the second quarter.

Cisco Systems once again put some distance between itself and competitor Juniper Networks during the third quarter in the high-end router market, according to recent research.

Cisco grabbed 65 percent of the $567 million market during the quarter, up from 60 percent in the second quarter, according to the Dell'Oro Group. Juniper had 32 percent, down from about 35 percent in the previous quarter, according to the research. Telecom carriers use high-end routers to send traffic over long distances at high speeds.

The results mark Juniper's second decline in two quarters. Juniper captured its largest portion of the market with about 38 percent in the first quarter of 2001, but it has fought a tough battle as Cisco introduced new products.

The router market has also been beaten down by cuts in overall spending in the telecommunications industry. Third-quarter sales rose about 7 percent from an adjusted $530 million in the second quarter, but sales dropped about 68 percent from the high of $835 million during last year's fourth quarter.

Other markets continued to slide. The once-hot DWDM (dense wavelength division multiplexing) metropolitan sector fell about 25 percent to $151.8 million from $201.5 million in the second quarter. DWDM technology allows more data to be sent over a single optical fiber, and industry analysts placed much hope on this market because of the relative lack of telecommunications capacity in urban networks.

"The market for the next few quarters will be somewhat stagnant," said principle analyst Shin Umeda of the Dell'Oro Group. "I don't think we'll see an immediate return to growth."

Umeda said that growth in this segment will be driven by Baby Bell companies like Verizon, SBC, and BellSouth. He believes those companies plan to take their time installing the gear, will only test the waters in 2002 and will not start buying significant amounts of equipment until 2003.