Routers are even smaller than bridges and switches. But routers operate on the Network layer, which is a higher level in the OSI conceptual model. While bridges and switches operate on the Data Link layer. Like switches, routers use a combination of software and hardware, but it is used to route data from its source to its destination. Routers actually have a sophisticated OS that allows them to configure various connection ports. You can setup a router to route data packets from different network protocol stacks, which include TCP/IP, IPX/SPX and AppleTalk.
Routers are used to segment LANs that have become so large that data traffic has become congested. Routers are also used to connect remote LANs together using different WAN technologies. But, when a router has become large, the large network is divided into logical segments called subnets. This division of the network is based on the addressing scheme related to a particular subnet is kept local. The router only forwards data that is meant for the subnets on the extended network. This routing of network data helps conserve network bandwidth.
Routers also help to decide how to forward data packets to their destination based on the routing table. The protocols built into the router's operating system is used to identify neighboring routers and their network addresses. This allows routers to build a routing table.