6/9/2010 -- Cisco Systems Inc is rolling in the carrier Ethernet space -- outpacing the market and leading all vendors in the first quarter of 2010.

That's according to market watcher Infonetics Research, which says that demand for Cisco's IP core and edge routing solutions increased markedly (on a year-over-year basis) in Q1. "Cisco is on a roll, bumping up their service provider IP core and edge router revenue by 6 percent in the first quarter of 2010 compared to the previous quarter, and up 33 percent compared to the first quarter of 2009," said Infonetics analyst Michael Howard, in a statement.

Cisco isn't just the beneficiary of a rising tide -- while some players did improve their showings, others (such as Alcatel-Lucent and Huawei) turned in worse-than-expected performances. "Smaller players Tellabs and NEC posted gains in the IP router segment, while many other vendors, notably Alcatel-Lucent, Ericsson and Huawei, posted revenue declines. Both Alcatel-Lucent and Ericsson noted supply problems with components and parts," Howard said.

What's more, Cisco's strong performance came during what is traditionally a down quarter for carrier Ethernet solutions, according to Infonetics. For example, global sales of IP edge routers, IP core routers, carrier Ethernet switches and multiservice ATM switches were off by 5 percent in Q1, relative to the fourth quarter of 2009. That was expected. What wasn't expected was Cisco's strong showing. The industry as a whole was up, year-over-year, from its Q1 2009 performance; Cisco, however, obliterated its competitors in year-over-year sales: its 33 percent increase (relative, again, to 2009) was more than double the industry average (which topped out at 14 percent).

From Cisco's perspective, the carrier-grade equipment segment has all but recovered. Most of its competitors -- even Alcatel-Lucent and Huawei (who blamed their poorer showings on parts shortages) -- would probably agree, too.

After all, while overall sales were down, sequentially, from Q4 of 2009 to the first quarter of this year, some market segments nonetheless bucked this trend: in North America, for example, sales of carrier routers and switches actually inched up a bit, growing by 1.5 percent in Q1. It might not seem like a lot, but demand for carrier-grade switches and routers positively exploded in the final quarter of last year, growing by nearly 20 percent. Or, to put it another way, Q1's 1.5 percent sequential increase represents a 19.5 improvement from the third quarter of 2009; moreover, North American sales of carrier-grade routers and switches were up by almost one-third (29 percent) year over year.

That good news was confined strictly to North America.

Globally, sales of carrier Ethernet switches, in particular, grew demonstrably (by 8 percent) between the end of last year and the first quarter of this year, and were up even more (by 22 percent) on a year-over-year basis.
--By Stephen Swoyer