Worldwide optical spending down in Q1, metro WDM and PON up, reports Infonetics Research

28 May 2003 San Jose, CA Lightwave -- Worldwide optical network hardware revenue decreased to $2.1 billion in the first quarter of 2003, down 7% from the fourth quarter of 2002, according to Infonetics Research. The total market in 2003 is expected to reach $8.5 billion. These results indicate that service providers are treating their capital expenditures (capex) dearly in the first quarter of a new budget year.

Contrary to the downward trend, first-quarter 2003 metro WDM revenue was up 2% and PON was up 3% from the fourth quarter of 2002, and long haul SONET/SDH switch revenue increased a surprising 15%.

"The metro WDM category has been increasing, and the mild 2% increase in the first quarter of 2003 continues this trend, with Nortel, ADVA, and Cisco contributing 37% of the revenue," said Michael Howard, principal analyst and co-founder of Infonetics Research. "This market is fueled by corporate Gigabit Ethernet and storage connections, and the new, cheaper CWDM products.

"We see some buying preference shift from intelligent SONET/SDH transport into the more versatile, intelligent SONET/SDH switch, which includes transport options, as evidenced by the 15% increase in long haul SONET/SDH switch revenue this quarter."

Four manufacturers accounted for 43% (including submarine) of optical hardware revenue. Alcatel, Nortel, and Siemens each led the market with 11%, and Fujitsu has 10%. Research also shows that SONET/SDH (70%) continues to outpace WDM (30%). Metro SONET/SDH (58%) and long haul WDM (21%) ranked as the top categories overall. Europe, the Middle East and Africa led optical hardware revenue worldwide with 33%, followed by Asia/Pacific at 32%, and North America at 27%.