Nortel said it now expects third-quarter business to be about 15% less than the $2.77bn (£1.78bn) it reported for this year's second quarter.
The company introduced an extranet management appliance that supports Secure Sockets Layer (SSL) and upgraded a line of IP services gateway devices so they can handle wireless LANs and voice over IP applications as part of what it called its Unified Security Architecture,
Yankee Group analyst Zeus Kerravala said Nortel's precarious financial condition requires it to put a renewed emphasis on technology innovation over networking services aimed at voice and data carriers.
"Nortel obviously bolstered its product line with this announcement, making a statement that it is a legitimate technology company to pull away from its service provider focus," Kerravala said.
He noted that the Alteon SSL 410 appliance for SSL extranets is the first application-layer accelerator and content-filtering product for virtual private networks (VPN) to be offered by a large networking vendor instead of by a startup.
The secure IP gateway, called Contivity, is already the most popular product of its kind with managers of large networks according to analysts. Now Nortel is adding secure routing technology that supports dynamic rerouting of data over a secure VPN link.
The Alteon SSL 410 appliance starts at $24,995 (£16,101), and an enterprise-class Contivity gateway costs $7,300 (£4,702).