Cisco Systems reported nearly $250 million in orders for its CRS-1 core router in the third fiscal quarter, implying a billion-dollar annual run rate for the three-year-old product.

The CRS-1 is “on a tear,” Cisco’s chief executive officer John Chambers said in the company’s earnings call this week. Only six months ago, the company was boasting of comparably smaller numbers: $150 million in quarterly orders for the fast-growing gear and $110 million in quarterly revenue.

When Cisco first unveiled the CRS-1 in May 2004, it was reported to be the fruit of two years and half a billion dollars in development. Today the high-capacity router typically contributes about half of the vendor’s core routing sales. Cisco introduced a half-sized version of the CRS-1 in 2005 and a quarter-sized version in 2006.

The CRS-1’s growth suggests Cisco is taking market share away from rivals in the space, analysts said. Cisco took 61% of the core router market in 2006, according to Ovum-RHK; that’s nearly double the share of its closest competitor, Juniper Networks.

“We think Juniper is developing a new single-chassis core router that will make it a greater competitive threat,” Morgan Keegan analyst Simon Leopold said in a research note today. “But it won't be alone, with vendors like Alcatel-Lucent showing good momentum.”

In what is typically the strongest quarter of the year for Cisco’s service provider business, overall orders from U.S. service providers were up by a percentage in the low 20s, Cisco said.