Ovum: Optical networking market on track for growth

Ovum became the third market research firm to note that the worldwide optical network (ON) equipment market dropped sequentially but grew year-on-year in the first quarter of 2011 (1Q11). The market also crawled back into the plus column on an annualized basis, Ovum reports.

According to the recently released Market Share Alert: 1Q11 Global ON, optical network hardware sales reached $3.5 billion in 1Q11. This represented a 7% improvement over the same quarter in 2010. Ovum’s growth estimate was slightly below that of Dell’Oro Group, which recently estimated that 1Q11 grew 10% versus 1Q10, but identical to that of Infonetics Research (see “Optical transport market grew 10 percent year-over-year to $3 billion in the first quarter” and “Infonetics: Optical hardware market declines in 1Q11, but growth still forecasted”).

Unlike these other firms, however, Ovum also reported that annualized sales reached a total of $14.6 billion, up 1%. Ovum asserts that annualized figures – which comprise the last four quarters, in this case second quarter of 2010 through the first quarter of 2011 -- provide the best indicator of longer-term market trends.

“The optical networking market continued to improve as we turned the page on a new year. Although spending was seasonally down on the previous quarter, the growth compared to the same quarter last year is very encouraging,” offered Dana Cooperson, Ovum network infrastructure practice leader and author of the market report. “Even more important is the small increase in annualized spending, which has been driven by strong growth in the dense wavelength division multiplexing market and a shift to optical products more fully optimized for continued strong growth in IP-based traffic.”

The Americas saw the strongest growth, according to Cooperson. Conversely, she called sales in the rest of the word “stagnant.”

“Asia-Pacific trends were particularly bleak in the first quarter of 2011,” Cooperson added.

As far as individual vendors were concerned, Alcatel-Lucent regained the top spot for the first time in two years in 1Q11 with revenues of $645 million, good for a market share of 18 percent. The former market kingpin, Huawei, lost the most annualized share.

Of the rest of the top 10 vendors, Ciena posted the greatest gain in annualized share. Other annualized share winners, in decreasing order of gains, included Ericsson, Fujitsu, Alcatel-Lucent, Cisco, and NEC. On the other hand, Tellabs and Nokia Siemens Networks lost share, while ZTE remained flat.

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