Huawei and Cisco were the big winners in optical network equipment sales during the third quarter of 2011 – if anyone could be considered as having a successful quarter given a slowdown in capital expenditures (capex). Market research firm Infonetics Research made this assessment when it released its third quarter 2011 Optical Network Hardware vendor market share report.
The worldwide optical network equipment market, including WDM and SDH/SONET equipment, sank 4% sequentially in 3Q11, from $3.5 billion to $3.4 billion. This contrasts to a 12% uptick in the previous quarter.
"Cisco posted a big sequential gain in optical equipment revenue (+46%), as did the vendors who sell into Japan, and WDM equipment sales were up in North America,” offered Andrew Schmitt, directing analyst for optical for Infonetics Research. “But outside of this, Q3 was not a strong quarter for the optical network hardware market.
“A telltale sign of a capex slowdown is when purchases of advanced equipment (WDM) decline and legacy equipment (SDH) increase -- this happened in the EMEA region (namely Europe), but not in North America. This is a key trend to watch for in 4Q11; if continued in EMEA this would be a strong negative leading indicator," Schmitt warned.
As a sign of the unhealthy environment, Huawei’s sales for the quarter declined sequentially – but the company gained market share. Huawei’s performance did represent an increase of 23% year on year.
The rolling 12-month spending averages reflected the fact that, despite the slow sales in 3Q11, the overall market is still doing better than last year. Year-over year, from 3Q10 to 3Q11, the overall optical network equipment market is up 5%.
In addition to SONET/SDH, WDM sales have seen an 18% year-over-year increase, while ROADMs sales set a new high in the quarter, up 4% sequentially.
North America posted modest quarter-over-quarter gains, led by Cisco, Nokia Siemens Networks, and ADVA Optical Networking. Performance in Asia remains comparatively weak, with Japan doing well but China not.
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