Cisco Systems Inc. (CSCO) said today that its flagship edge router has been doubled in density to help customers in efficiently handling the growing web video traffic. This upgraded version of the Aggregation Services Router 9000 Series will enhance the IP-based networking giant’s supremacy in the market.
Cisco also announced that it won a supply deal with Telstra Corp., Australia’s largest phone supplier. According to the agreement, Cisco will supply its Aggregation Services Router 9000 Series to Telstra’s carrier Ethernet platform and support a range of bandwidth-intensive, content-based services such as video. Other details of the deal were not disclosed.
Moreover, service providers like Cogent Inc. (COGT), Softbank and Verizon Wireless (VZ) have selected the Cisco ASR 9000 as their next-generation edge routing platform. This increased customer wins will drive revenue at Cisco.
According to the Cisco Visual Networking Index, the use of video and mobile Internet is growing at an incredible rate. By 2013, all forms of video such as TV, video on demand, Internet video and peer-to-peer will exceed 90% of global consumer traffic. In addition, fixed-network and mobile data combined is expected to grow 66-fold by 2013.
Cisco is one of the largest providers of routers and switches. Routers help in transferring data, voice and video from one IP network to another. The company, through its router business, is well positioned to capture such high growth in IP data traffic.
Despite booming business opportunities, Cisco’s ASR 9000 edge routers are facing increasing competition and losing market share to rivals like Hewlett-Packard (HPQ), Alcatel-Lucent (ALU) and Juniper Networks (JNPR).
In the near future, meaningful growth is expected to come from increase in customer orders. We thus have an Outperform rating on Cisco stock.
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