Nokia on Wednesday launched world’s fastest network chip, while giving a much needed boost to its existing network hardware business. This marks a massive breakthrough into the core router market traditionally dominated by rivals Juniper and Cisco.
Nokia with a changed strategy is targeting “web-scale” customers such as Facebook, Google and Amazon among others. The strategy shift maintains getting mega clients in for whom transmission speed is be all end all. Many of the major companies are still increasing spending on network gear. The move is seen as a first step in a major vision change which aims to future proof and diversify revenue streams as the traditional base of telecoms customers continue to look for profits through cost reduction measures.
Nokia reaping benefits of Alcatel Takeover
The new products is chiefly developed using Nokia’s 15.6 billion-euro ($17.5 billion) 2016 acquisition of Alcatel and its IP network gear business. One of the reasons why Nokia remains bullish about the routers is the increase in future demand for virtual reality based applications among others. All of the applications of the future require gigantic amount of data to be routed between several output points.
Nokia believes that the new traffic routers will be able handle the greater demands of virtual reality programming, cloud-based internet services, and next-generation mobile communications better than anything already available in the market.
Nokia also is adamant that the new product will fit in the telecom sector as well. Nokia’s existing telecom operator base wants upgrades that are backward compatible with legacy systems, we are told.
Ray Mota, principal analyst, ACG Research, has been found saying:
“With this announcement, Nokia will have the highest-performance system capacity in the market, and a lot of those web-scalers, they just want speed.”
“That gives them an opportunity to approach the core network market with more credibility and gain some traction there.”
Nokia is introducing its latest FP4 silicon chipset capable of processing data at 2.4 terabits per second. This chip will be used in building a new portfolio of ultra high-speed core network routers.
The new products are scheduled to ship in the fourth quarter of this year, Nokia has confirmed.