Inventory Correction Causes High End Router Market Slowdown in Second Half of 2023, According to Dell'Oro Group

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Feb 22, 2024, 08:00 ET

High End Router Revenue Declined 8 Percent in 2H 2023

REDWOOD CITY, Calif., Feb. 22, 2024 /PRNewswire/ -- According to a recently published report by Dell'Oro Group, the trusted source for market information about the telecommunications, security, networks, and data center industries, the High End Router market declined 8 percent year-over-year in the second half of 2023, following an abrupt surge in equipment deliveries in the first half of the year.

"The disruptions caused by component shortages and supply chain bottlenecks that started over two years ago are still occurring," said Jimmy Yu, Vice President at Dell'Oro Group. "Once supply freed up, router manufacturers were able to fulfill backlogged orders at a faster pace, driving High End Router revenue up 12 percent year-over-year in the first half of 2023. However, this turned into extra inventory at customer sites, causing them to rationalize future new orders. We believe it may be another two quarters before inventory levels return to normal levels at these service providers," added Yu.

Additional highlights from the 4Q 2023 Service Provider Router and Switch Report:

The High End Router market reached nearly $13 billion in 2023. The top three vendors by revenue share were Cisco, Huawei, and Nokia. The only vendors to gain more than one percentage point of market share were Cisco and Huawei.
Core Router revenue grew 14 percent in 2023. The top three vendors by revenue share were Cisco, Huawei, and Juniper. Cisco gained nearly 6 percentage points of market share and was the only vendor to gain market share in the year.
Edge Router and Aggregation Switch revenue was unchanged from the year ago period.

About the Report
The Dell'Oro Group Service Provider Router & Switch Report offers complete, in-depth coverage of the Service Provider Router and Switch market for current, future, and historical periods. The report includes qualitative analysis and detailed statistics for manufacturing revenue by region, customer type, use cases, average selling prices, and unit and port shipments. To purchase this report, please contact us by email at [email protected].

About Dell'Oro Group
Dell'Oro Group is a market research firm that specializes in strategic competitive analysis in the telecommunications, security, enterprise network, and data center infrastructure markets. Our firm provides in-depth quantitative data and qualitative analysis to facilitate critical, fact-based business decisions. For more information, contact Dell'Oro Group at +1.650.622.9400 or visit https://www.delloro.com.

SOURCE Dell'Oro Group