Service provider spending on core and edge IP gear is booming, while multi-service switch sales decline, a new report from Infonetics said Thursday.

Global sales of routers and switches grew 37% to $7.2 billion between 2002 and 2005, the report states, including a 77% increase in router sales. Multi-service switches, used to support legacy ATM networks, declined by 5% during that period to $1.98 billion. In the year 2000, multi-service switches hit the $5 billion sales mark.

"The decline of multi-service switches and the rise of core and edge routers are a sign of the times," said Michael Howard, principal analyst at Infonetics. “Service providers are clearly moving toward next-gen IP and Ethernet networks, while decreasing investments in their ATM networks. Service provider routers are performing remarkably well, posting a 31% increase between 2004 and 2005.”

Routers now comprise 75% of switch/router sales, up from 47% in 2000, with switches dropping off to 27% of the total.

Not surprising, leading router maker Cisco Systems is benefiting heavily from the shift, increase its revenue by $300 million to $2.6 billion in the service provider market, even as it lost market share to Juniper Networks. Cisco now holds a 53% share of the service provider market, compared to Juniper’s 26%, Infonetics reported. Huawei and Alcatel are third and fourth in the worldwide market.

Nortel leads the multi-service switch market, followed by Alcatel and Lucent, the company said.