Routers rebound now; optical, wireless later

The router market worldwide will grow by 6% over the next five years, while optical transport and mobility infrastructure will not be significant growth until the year 2005, according to Dell’Oro Group.

In a series of five-year forecasts, Dell’Oro said the router market will grow from $ 6.3 billion in 2003 to 8.6 billion U.S. dollars in 2008. The second half of 2003 was the “turning point” for the market, which had experienced declining sales for several years, Dell’Oro states.

telecommunications service providers and enterprises are planning to increase investment in their router networks this year, Dell’Oro expects this trend to continue over the next five years.

The market for optical transport equipment will be flat this year, after years of decline, and return to sales growth in 2005, says Dell’Oro. Sale of optical transport equipment will reach 7.3 billion U.S. dollars by the year 2008, the company provides, from $ 6.1 billion in 2003.

Metro applications will lead to recovery as service providers focus on offering differentiated services, says Dell’Oro. In 2004, the company estimates that 65% of sales of optical transport equipment will be deployed in an application of a meter, compared with 30% three years ago at the peak of the optical market.

Meanwhile, the market for total mobility infrastructure – GSM / GPRS / EDGE, TDMA, CDMA and WCDMA – reduced by 1% in 2004 to 25.7 billion U.S. dollars, and then begin to recover in 2005 with 5% growth, says Dell’Oro. Growth is forecast to accelerate to 13% in 2006 due to new deployments in China, and CDMA 1X EV-DO and DV upgrades.

In 2006, revenues infrastructure and WCDMA base station shipments down surpass those of GSM-based systems.

The total market, driven mainly by WCDMA, will increase by 7% in 2007 and 2008, reaching 34.8 billion U.S. dollars in 2008, the company says.

Trends fueling the recovery include improved global macroeconomic environment, improving the service economy, such as stabilized average revenue per user per month, and low capital expenditure income ratio and the proliferation of subscriber terminals color screens and cameras, which will stimulate the development of applications.