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Will Nokia's future-thinking routers bring back growth?

Rob Horgan
Will Nokia's future-thinking routers bring back growth?

Nokia’s bid to get its business back to growth looks to have taken a positive step in the right direction. Unveiling a couple of network routers, the Finnish company appears to be targeting new technologies in order to bolster its stock.

The new routers, designed to provide the fastest speeds and ‘capacity’ dedicated to cloud computing have been made with the likes of 5G wireless and the Internet of Things in mind.

The new products, which are due to ship in the final quarter of this year, are suppose to ‘ensure modern networking systems of webscale companies and service providers can meet data demand, adapt to change, and scale cost-effectively and securely for the cloud, 5G and IoT’. Both devices use special semiconductors designed by Nokia called the FP4.

The first device – the 7750 Service Router – is, in fact, is able to transmit 144 terabits per second in a single shelf, referring to the standard configuration into which equipment is placed in a telco’s equipment rack. Meanwhile, the second router – the 7950 Extensible Routing System – is the ‘highest-capacity’ router possible, providing up to 576 terabits per second in a single system.

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However, not everyone is convinced that this move is enough to get Nokia back on track. Wells Fargo analysts Maynard Um said Nokia still has an uphill battle to get its networking business back to growth, following the product announcement.

“While we believe today’s announcement could help stabilize and potentially grow IP Networks revenues y/y in 2018, we expect the segment to continue to be pressured near-term with continued y/y declines due to a soft market and product transition,” he said. “While there is engagement and interest from web-scale customers, we believe NOK’s broader initiatives in targeting adjacent growth markets could take time to ramp and maintain our Market Perform rating.”

Shares of Nokia closed down 4 cents, or 0.6%, at $6.38.

Tags: nokia, Vendors, routers, 5G, IoT

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