Cisco Switch Sales Booming

Cisco's booming Ethernet switch business could spell upside for investors.
Author:
Publish date:

SAN JOSE, Calif. (

TheStreet

) --

Cisco

(CSCO) - Get Report

may be

pulling out all the Hollywood-star stops to sell its latest technology

, but investors should also be keeping an eye on the infinitely less sexy world of network gear.

Cisco saw its Ethernet switch revenue leap 23.5% between the fourth quarter of last year and the first quarter of 2010, according to the latest numbers from

Infonetics Research

. Cisco's Nexus product was the major driver of this growth, reflecting a broader rebound in enterprise data center spending.

"We saw a 30% sequential jump in purpose-built switch sales in the first quarter of 2010, with Cisco a driving force with their Nexus switch line," explained Infonetics analyst Matthias Machinowski in a statement. "Healthy annual growth is expected to continue in this segment."

Infonetics' numbers come at an interesting time for Cisco, which has undergone a major metamorphosis in the last few years. In addition to entering the server market with the launch of its controversial

UCS

technology, Cisco has also

ramped up its videoconferencing efforts

and moved into the consumer market with the acquisition of

Flip camera maker Pure Digital.

Clearly, though, Cisco's core networking credentials remain strong, something that hardly spells good news for rivals such as

Juniper

(JNPR) - Get Report

and

Hewlett-Packard

(HPQ) - Get Report

, which spent

$2.7 billion on switch maker 3Com.

In addition to Ethernet switches, there is also growing demand for devices which handle how apps are delivered across networks. Sales of Application Delivery Controllers, as they are known, have grown 28% sequentially, according to Infonetics, with

F5 Networks

(FFIV) - Get Report

leading the way.

The research firm explained that F5 now has a 20-point market share lead over Cisco in the Application Delivery Controller market. Elsewhere in the data center,

Blue Coat

(BCSI)

, which manages traffic running over Wide Area Networks (WANs) is also enjoying strong demand, with revenue increasing 7% sequentially.

Earlier this week, Cisco also

unveiled new business apps

for

Apple's

(AAPL) - Get Report

iPad and iPhone.

Cisco shares rose 60 cents, or 2.35%, to $2.61 on Tuesday, mirroring the broader advance in tech stocks that saw the Nasdaq gain 2.39%.

-- Reported by James Rogers in New York

See Also:

>>New iPhone Won't Sink Cisco's Flip Cam

Follow James Rogers on

Twitter

and become a fan of

TheStreet.com

on

Facebook.