Worldwide optical network hardware revenue totaled $2.26 billion in the third quarter of 2002, down 14% from last quarter, according to Infonetics Research's quarterly worldwide market share and forecast service, "Optical Network Hardware." After declines in 2003 and 2004, worldwide revenue is projected to be slightly up in 2005.
Metro optical makes up the largest portion of the optical network hardware market, with 64% of the total in the third quarter of 2002. Metro optical includes legacy SONET/SDH, intelligent SONET/SDH (transport and switching), WDM (transport and switching), and PON.
Carriers have shifted their spending priorities to metro over the past few quarters, due to their largely built out long haul networks and reduced capital spending. As a result, manufacturers are more competitive in this space, especially with their rollout of intelligent optical products. Legacy metro products continue to lose ground each quarter. While the total metro market is down 8% in the third quarter, intelligent metro is down only 5%.
"Intelligent equipment represents 69% of metro optical revenue in 3Q02," asserts Michael Howard, principal analyst and co-founder. "While revenue in most optical categories will decline in the next year, we expect a 7% year-to-year growth in intelligent metro optical revenue between CY02 and CY03. Manufacturers with legacy products need to upgrade them or replace them to take advantage of this market segment."
Regional spending for metro optical network hardware is fairly even, with the Asia/Pacific region in the lead at 34% of the worldwide total, followed by North America and EMEA with 30% each.
Infonetic's quarterly report also reveals that:
#&149 Intelligent optical network hardware hit $1.6 billion, comprising 72% of all optical network hardware revenue.
#&149 Between 2002 and 2003, the total optical market will decline 12%, from $10.2 billion to $9.0 billion, but the intelligent metro portion will increase 7%, from $4.1 billion to $4.4 billion; legacy metro will decrease 33% to $1.4 billion
#&149 Five manufacturers account for 59% of the revenue market share for total optical hardware (including submarine): Alcatel leads with 15%, followed by Nortel, Fujitsu, Lucent, and Siemens.
#&149 Alcatel leads in intelligent metro optical market share, followed by Siemens, Nortel, Cisco, and Huawei; in legacy metro, Fujitsu, Marconi, and Lucent are strongest.
#&149 SONET/SDH continues to outpace WDM sales by a more than two-to-one ratio, representing 70% of total spending in the third quarter (WDM represents 29% and PON is about 1%).
Intelligent optical hardware is defined as data-aware equipment with remote configuration and remote service provisioning that can be deployed in mesh, star, and ring, allowing carriers to build out and revamp optical networks quickly.
For more information about Infonetics Research (San Jose) or the report, visit the company's Web site at www.infonetics.com.