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Huawei is one of the culprits behind Cisco's -22.4% decline in IP edge revenue share
Tue, 8/30/11 - 3:12am    View comments

Earlier this month I was treated to lunch on Wall Street by a global technology titan that has more than 4 times the revenue of Cisco.

Naturally, our topic of discussion was Cisco.

But what surprised and shocked me the most was just how frightened this global technology titan was of telecom network equipment provider - Huawei.

I mean, this global technology titan fearfully admitted to me that once Huawei entered a market, that market's future profitability for this global technology titan was near an end, meaning, it can't profitably compete against Huawei.

Alarmingly (at least in my opinion), Michael Howard - principal analyst for carrier networks at Infonetics Research, revealed in his new report last week:

Huawei is one of the culprits behind Cisco's -22.4% decline in IP edge revenue share:

"Alcatel-Lucent, Huawei, Juniper and even ZTE continue to take market share from Cisco in the critical IP edge segment (the sum of IP edge routers and carrier Ethernet switches). Cisco is actually doing really well, with global IP edge revenue up 12% in the second quarter of 2011, and still commands close to a third of the worldwide market.

"The problem is that Cisco's competitors are growing faster: Huawei's IP edge revenue grew 66% and Alcatel-Lucent's 22% in 2Q11.

"Over the last year and a half (1Q10 to 2Q11), Cisco's IP edge revenue share declined from a high of 41.5% to 32.2%, while its closest competitors gained between 2 and 5 percentage points of share."

Howard continued, "Alcatel-Lucent and Huawei have end-to-end portfolio solutions for broadband and mobile networks, and, according to our surveys, many service providers see Juniper and ALU as offering competitive technology at a better price point.

"Meanwhile, ZTE is growing in the mobile space, particularly mobile backhaul. For these and other reasons, these manufacturers are winning big deals in the IP edge space and gaining on Cisco."

Related stories:

Will Huawei and ZTE terminate Cisco's robust gross margin?

Huawei replaced Cisco as the world's 5th most innovative company

Does Huawei have the most potential to eat Cisco's lunch?
 

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