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Enterprise router market sees decline

Enterprise router revenue dropped 2% overall in 2004, but demand for routers with built-in security is on the rise, according to new research.

Enterprise router revenue dropped 2% in 2004, resulting in a $3.4 billion in business for manufacturers, according to Infonetics Research Inc., San Jose, Calif.

Router revenue was also down 2% for the fourth quarter of 2004, but Cisco Systems Inc. remains firmly in the lead. The San Jose, Calif.-based networking giant saw its market share increase one point to 77%. The company generated 84% of router revenue worldwide last year.

Matthias Machowinski, directing analyst for enterprise voice and data at Infonetics, said 12% of fourth quarter enterprise router revenue for 2004 came from the sale of secure routers, which was a 1% rise from the previous quarter.

"We project secure routers to continue to take up a growing slice of the router revenue pie, accounting for 29% of total router revenue by 2008," Machowinski said in a written statement. "Over time, router vendors could add security features into their routers as a default offering, at no extra charge, causing the standard enterprise router category to disappear."

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