Optical spending is stabilizing, according to Infonetics Research

3 December 2003 San Jose CA Lightwave--Worldwide optical network hardware revenue hit $2 billion in 3Q03, a 3% decrease from 2Q03, according to Infonetics Research's quarterly worldwide market share and forecast service, Optical Network Hardware. After a decline in 2003, modest growth is projected through 2006, when the market will top $10 billion.

3 December 2003 San Jose CA Lightwave--Worldwide optical network hardware revenue hit $2 billion in 3Q03, a 3% decrease from 2Q03, according to Infonetics Research's quarterly worldwide market share and forecast service, Optical Network Hardware. After a decline in 2003, modest growth is projected through 2006, when the market will top $10 billion.

"The optical hardware market is stabilizing," said Michael Howard, principal analyst and co-founder of Infonetics Research. "The telecom service provider capex [capital expenditure] declines are finished or nearly finished, and they will maintain a flat-to-slow-growth in the future. We expect optical equipment spending worldwide to be relatively stable from 2003 through 2006, and in North America to level out during 2003 and then start slow growth in 2004 to 2005."

3Q03 optical hardware revenue highlights:

• Alcatel maintains its number-one spot in worldwide revenue market share (intelligent plus legacy) with 14%, followed by the same three market share challengers from 2Q03, Huawei, Lucent, and Nortel, each with 11%.

• Intelligent optical network hardware makes up 82% of all optical network hardware revenue, while legacy continues its decline at 18%; legacy will decline to about 3% in 2006.

• Metro networks will remain the focus in general for some time in all regions; metro makes up 70% of all optical network hardware revenue this quarter.

• Metro WDM continues its growth, up from 2Q03 to a total of $243.7 million, with DWDM up 5%, and the burgeoning but smaller CWDM market up 19%.

• Metro SONET/SDH makes up the lion's share (56% at $1.1 billion) of total optical equipment sales, led by Alcatel (16%) and Fujitsu (14%).

• Regional breakdown: 33% Asia Pacific, 31% North America, 30% EMEA, and 7% from CALA; Asia Pacific has many buildouts, China has slowed, and India is picking up.

The Optical Network Hardware report tracks SONET/SDH, CWDM/DWDM, and PON hardware. Forecasts and regional market share are updated quarterly and cover all regions (worldwide, North America, EMEA, Asia Pacific, CALA). Companies tracked in this service include ADVA, Alcatel, CIENA, Cisco, Fujitsu, ECI-Lightscape, Lucent, Lumentis, Marconi, NEC, Nortel, Siemens, Tellabs, and many others.

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