While analysts said the upgrade was significant and could help boost sales to phone carriers grappling with surging Web use, they said the news fell short of Cisco's earlier promise to unveil a technology that "changes the Internet forever."
Shares of Cisco ended the day unchanged at $26.13, after gaining 4 percent the previous day, a rise that was in part in anticipation of the announcement.
"Everybody expected them to refresh their core routers but the way they hyped it I thought there was going to be more to it," Piper Jaffray analyst Troy Jensen said.
Cisco, the world's largest network equipment maker, said up to 72 of the new CRS-3 routers can be connected for capacity of 322 terabits per second (tbs). The new routers hit the market in the third quarter of this year.
At that maximum configuration, Cisco boasted the routers could in theory deliver every movie ever made in four minutes over the Internet, or connect China's entire population of 1.3 billion people by video conference at the same time.
While operators do not put this much routing power into their networks today, Cisco is betting that surging Web traffic -- driven by smartphones like Apple Inc's iPhone and services like Google Inc's YouTube -- will make these products necessary in the future.
Cisco said it has sold 5,000 of its current most powerful router, the CRS-1, to 300 operators, which would be an average of 17 per carrier.
The CRS-3 router took Cisco three years to develop and supports data speeds three times faster than its own existing products. It goes on sale starting at $90,000 each.
"It's a big deal for Cisco and its carrier customers," Broadpoint AmTech analyst Mark McKechnie said, though he did not expect an impact on revenue this year. "It's probably a long evaluation cycle, so it's not something we think will really impact Cisco numbers until 2011 or 2012."
Cisco said it has invested $1.6 billion in the CRS product line including half a billion dollars spent to build the CRS-1. It did not break out spending for CRS-3.
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