Cisco Systems Inc, the world’s biggest maker of network equipment, said sales of its high-end routers accelerated in the past several months despite worries that a slower U.S. economy was hurting technology spending.
Cisco said it sold 900 units of the CRS-1 — a router used in the very center of phone and cable service providers’ networks to direct their Internet traffic — in the nine months through March.
That is the same amount sold since the product’s launch in May 2004 through June 2007, the company said.
Each CRS-1 unit costs around $500,000 to more than $1 million, depending on configurations. Most buyers are large phone and cable service companies such as AT&T Inc, Comcast Corp, Deutsche Telekom AG and Sprint Nextel Corp.
“It’s a testament to a couple things. One, the usefulness of the router. Two, the exponential growth of traffic on the Internet, due largely to the development and deployment of video services,” said Wilson Craig, a Cisco spokesman.
“Thing like Youtube, Facebook, MySpace — these things are really ramping video traffic in ways that I don’t think we could have predicted when we developed the router.”
Cisco expects Internet video traffic to be 20 times what it was in 2006, driving sales of routers and other network equipment.
Rival network equipment maker Juniper Networks Inc sells a core router called the T1600 that competes with the CRS-1.
On the other hand, the overall network equipment industry is seen under pressure as telecoms carriers merge. Avici Systems Inc, recently renamed Soapstone Networks Inc, announced last year that it was discontinuing its core router development.
In February, Cisco warned of a rapid slowdown in U.S. and European orders, and gave a disappointing outlook on the current quarter.