9/7/2010 -- Thanks to strong demand for big-ticket routers and switches, things are looking up for Cisco Systems Inc., Alcatel-Lucent, Juniper Networks and other players.

Demand for IP core and edge routers was so strong, in fact, that market watcher Infonetics Research dubbed this segment "the hero" of Q2, at least for the networking industry. "IP core and edge router revenue in North America was the hero of the second quarter, up 15 percent sequentially and up 39 percent from this time last year, as operators put spending back on priority to handle more traffic, especially video over broadband and data and photos over mobile networks," said Infonetics co-founder Michael Howard, in a statement.

While demand for IP core and edge gear was strong in North America, the EU -- according to Infonetics --  remains "in a holding pattern, struggling to pull out of the downturn." Elsewhere, demand in the Asia-Pacific region was healthy -- at 10 percent, sequentially -- but still lags behind the torrid pace (fueled largely by spending on the part of Chinese service providers) set just a year ago.

The three biggest players in the carrier routing segment -- i.e., Alcatel-Lucent, Cisco and Fujitsu, respectively -- all posted double-digit (year-over-year) revenue growth. Elsewhere, Huawei, Juniper, Tellabs and ZTE -- which round out the top seven -- turned in double-digit year-over-year showings.

For the quarter, ATM switch revenues plunged precipitously, dropping by 54 percent. ATM's loss is Ethernet's gain, according to Infonetics, which says shops are abandoning their legacy ATM investments in favor of Ethernet-based gear. 

It's a long, hard road back, however; sales of carrier-grade routers and switches aren't projected to surpass their pre-recession tallies (notched in 2008) until next year, according to Infonetics.
-By Stephen Swoyer