Market Forecast: IP Packet Transport to Experience Strong Growth: Industry Report

Market Forecast: IP Packet Transport to Experience Strong Growth

Product Type: Market Research Report
Published by: Ovum Plc
Published: August 2005
Product Code: R464-57

Description

Ovum-RHK forecasts that the global market for IP packet transport equipment will grow from $6.4 billion in 2004 to $7.9 billion in 2010. This increase over previous forecasts reflects upside from IPTV in the later years of the forecast, continued growth in broadband Internet, and a positive outlook for IP VPNs. However, a probable downturn in Asia during the forecast period, increased commoditization, and cost pressures forced by service pricing trends will dampen expectations somewhat. In this new forecast, MSS edge and MSS core are collapsed into one category. This forecast covers IP routing (core, edge, and service), multiservice switching, and Ethernet switching.

Table of Contents

Ovum-RHK Analysis
Despite some macro-level concerns, such as regional economic stability, regulatory clarity, and the uptake of IPTV, the most likely scenario for IP packet transport is strong growth driven by IP VPNs and a move to 10 Mbps+ broadband Internet services.
Key Macro-level Market Drivers
Significant clarity in regulation has occurred over the last two years, but the rewriting of the U.S. 1996 Telecom reform act threatens to delay clarification of a number of important issues. The most disturbing additional issue is the lack of clarity on future Asia-Pacific economic performance.
Product Group Forecasts
For 2010, we forecast the following: Core IP routers: $3.1B; edge IP routers: $2.3B; subscriber services routers: $1.2B; MSS: $1.1B; and Ethernet service switches: $351M.
Regional Forecasts
North America will be about 35 percent, EMEA about 35 percent, and AP about 24 percent of the market through the forecast period.
Forecast Methodology
Key drivers are traffic, utilization, service demand, and product configurations.
The Bottom Line
The most likely scenario is for strong growth during the forecast period, but particular attention needs to be given to economic stability in Asia and regulatory reform in North America.
Appendices
A: Forecast Methodology Flowcharts
B: Segment Definitions and Representative Products
Tables and Figures
Table 1: Key macro-level forecast assumptions underlying the global IP service infrastructure forecast
Table 2: Global IP packet transport forecast vs. global wireline capex forecast, 2004-10 ($ billions)
Table B-1: IP market segment definitions and products
Table B-2: MSS market segment definitions and representative products
Table B-3: Ethernet service switch segment definition and representative products
Figure 1: Global IP service infrastructure market forecast, 2002-10
Figure 2: Global IP service infrastructure most likely forecast by product group, 2002-10
Figure 3: Global IP service infrastructure revenues by quarter, 1Q02-1Q05
Figure 4: Ovum-RHK's global IP service infrastructure forecast, October 2004 vs. August 2005
Figure 5: Global core IP router revenue forecast, 2002-10
Figure 6: Global edge IP router revenue forecast, 2002-10
Figure 7: Global subscriber services router revenue forecast, 2002-10
Figure 8: Global multiservice switch revenue forecast, 2002-10
Figure 9: Global Ethernet switch revenue forecast, 2002-10
Figure 10: Global IP service infrastructure investment by region, 2002-10 ($ millions)
Figure 11: IP service infrastructure forecast methodology
Figure A-1: Methodology for IP equipment forecasts
Figure A-2: Methodology for MSS equipment forecasts

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