Demand for enterprise routers remains high, particularly for products with built-in security features, according to the latest figures from communications industry analyst group, Infonetics Research. But revenues across the sector continue to slip due to ongoing price pressure.

According to Infonetics, worldwide enterprise router revenue totalled $750 million in the first quarter of 2005, down 9% from the previous quarter and 20% lower than a year ago. Global unit shipments increased 4% in same period.

As a result of the falling prices manufacturers are expected to shift their attention to the more lucrative secure router market – currently this sector is worth 13% of the total router revenues.

Meanwhile, the high-end router market (10Gbps and above) – responsible for half of worldwide enterprise router revenue – grew 9% in the first quarter of 2005, reaching $420 million, according to market watcher Dell'Oro Group.

"Even though the first quarter of the year is seasonally weak, high-end router demand was exceptional," said Dell'Oro analyst Shin Umeda. "Internet and telecommunications service providers around the world are investing heavily in their backbone networks to keep up with the onslaught of network traffic coming from broadband users," he added.

This demand is reflected in analyst house Gartner's latest predictions that broadband subscriptions will be worth $109.8 billion by 2009.