3/4/2004 -- Recent market research data suggests that Juniper Networks Inc. may be growing its market share at the expense of Cisco Systems Inc. and other competitors. Juniper’s surge corresponds with the first sustained growth in sales of enterprise and carrier-class routers since the economic downturn of 2001.

Market research powerhouse Gartner Inc. reported earlier this week that Juniper grew its market share in the high end carrier-class router space during the fourth quarter of 2003, possibly at Cisco’s expense.

Juniper’s Q4 revenues were up by nearly 11 percent, from 24 percent to 26.6 percent. Conversely, market leader Cisco’s revenues slipped, from 59.4 percent to 57 percent – a decline of about 4 percent. Third place belonged to Nortel Networks Ltd., which suffered the biggest overall decline, its market share eroding by almost 19 percent, from 4.8 to 3.9 percent.

For the quarter, sales of carrier-class routers amounted to $673.7 million, a 13 percent spike from Q3. This marks the third successive quarter in which carrier-class router revenues have posted year-over-year and quarter-over-quarter gains, dating back to Q2 of 2003. Service provider router sales bottomed out in Q1 2003, dropping four percent from Q4 2002. Since then, however, the high-end carrier space has rebounded strongly, posting six percent quarter-over-quarter growth in Q2 and 19 percent in Q3.

For the record, Cisco recorded $384.1 million in carrier-class revenues during the fourth quarter, Gartner said, which represents an 8 percent increase from Q3. Juniper, for its part, grew its revenues by 25 percent, to $179.1 million.

Gartner’s report is the latest indication that there’s a recovery afoot in the router space, especially in sales of high end routers. According to a recent report from market research firm Dell’Oro Group, for example, worldwide router sales increased by 3 percent last year to $6.3 billion. This rebound marked the first annual sales growth in the router space since the onset of an economic downturn in 2001, the market research firm said.

After a slow start, Dell’Oro Group found that sales of high end routers took off in the second half of 2003, ultimately recording growth of 22 percent for the year. At the same time, growth at the high-end was offset by a decline in low-end, business-class router sales, which dropped by 5 percent.

Cisco retained its number one position in the Dell’Oro Group study, with Juniper a distant second. At the same time, the research firm found that Cisco’s revenues declined by 2 percent in 2003, while Juniper’s accelerated by 9 percent. -Stephen Swoyer