Nokia targets gains with fastest routers
SAN FRANCISCO: Nokia launched the world’s fastest network chips last Wednesday, breaking into the Juniper and Cisco dominated core router market and giving its existing network business a boost.
The new traffic routers can handle the greater demands of virtual reality programming, cloud-based internet services and next- generation mobile communications, the Finnish company said.
Nokia’s new products, which grew out of its 15.6 billion- euro ( US$ 17.5 billion) 2016 acquisition of Alcatel and its IP network gear business, should help it win business from companies such as Facebook, Google, Apple and Amazon.
For these “web- scale” customers speed is everything and unlike Nokia’s traditional telecoms customers they are still increasing spending on network gear.
The routers are compatible with older products and will also serve Nokia’s existing customers who want speed but must still contend with legacy gear needed to run existing services.
“Nokia will have the highestperformance system capacity in the market, and a lot of those web- scalers, they just want speed,” Ray Mota, principal analyst at ACG Research, told Reuters.
The former Alcatel IP networks business is already the world’s No. 2 player in edge routers behind Cisco, having displaced Juniper Networks, which is now No. 3.
The Nokia business also competes with Huawei in router markets outside the United States, where the privatelyheld Chinese firm is barred for national security reasons.
Nokia executives expect to take market share from all the big competitors, including Cisco and Juniper as well as Huawei.
“Whether its web- scale or vertical markets (such as banks, transportation, energy and public sector), where we have been less exposed in routers, clearly we will gain share,” Nokia Chief Executive Rajeev Suri told Reuters in an interview.
“This gives us momentum in core routing.”
Simon Leopold, a financial analyst with Raymond James, said Juniper, which depends for around a quarter of sales from web- scale customers such as Facebook could be hardest hit. “There is at least headline risk to Juniper, once Nokia ships,” he said.
Shares of Juniper Networks fell 2.4 per cent to US$ 28.60, while Cisco fell one per cent to US$ 31.38. Nokia’s US-listed shares dipped a little under 1 per cent.
Nokia said it is introducing its latest FP4 silicon chipset capable of processing data at 2.4 terabits per second.
The new chipsets are set to ship in the fourth quarter, with routers running FP4 chips ready in the first quarter of next year. — Reuters