Infonetics: Region-specific optical market recovery continues in 2Q10

AUGUST 16, 2010 By Stephen Hardy -- Coming off a 14% quarter-on-quarter decline in Q1, global optical communications hardware spending rebounded in 2Q 2010, say new figures from market research firm Infonetics Research. The space rose 2.9% over the previous quarter to reach $3.05 billion.

However, not every region enjoyed a bountiful three months. The gains were led by Asia-Pacific, North America, and Central America/Latin America. The Europe, Middle East, and Africa (EMEA) region was roughly flat.

In a conversation with Lightwave, Andrew Schmitt, Infonetics Research's directing analyst for optical, said that regions such as Asia-Pacific and North America have enjoyed relatively steady growth over the past four quarters. However, an overall sense of caution among major European carriers continues to dampen the EMEA market. The result is that while Infonetics touted the 2Q 2010 numbers as a sign of market recovery, the $3.05 billion spent during the quarter was less than the space's $3.4 billion in revenues during the same period last year (see "Optical network hardware market hits bottom in North America; EMEA region weakens").

Infonetics Research earlier this year had forecasted 12% growth in 2010 for optical hardware in EMEA (see “Infonetics: 12% recovery in store for EMEA optical network hardware market”). It would seem the market would need to rebound strongly -- and quickly -- to hit that number.

Meanwhile, the continuing strength of Asia-Pacific (8.1% sequential growth in 2Q 2010) doesn’t quite mesh with Schmitt’s earlier prediction of a slowdown in the region (see “Infonetics: Resilient Asian optical network hardware market headed for slowdown”). Schmitt isn’t backing off his opinion, however. Both China Telecom and China Mobile say they plan to cut capital expenditures, he noted -- cuts they have not yet enacted. While Schmitt believes the reductions will most strongly affect wireless spending, their influence on optical purchases remains uncertain enough for him to assert that 2010 will not see the growth rates of past years in the region.

Thanks to its strength in Asia-Pacific and ability to wrest at least some cash from EMEA, Huawei solidified its top position in the optical systems hardware market over number two Alcatel-Lucent, Infonetics says. Schmitt added that Ciena (thanks in part to revenue from its Nortel acquisition) Fujitsu, and ZTE round out the top five globally, although not necessarily in that order; Schmitt said that Infonetics reserves full ranking details for its clients.

The Optical Network Hardware vendor market share report from Infonetics provides worldwide and regional market share, market size, forecasts through 2014, and analysis for metro and long-haul optical network equipment. The equipment list includes SONET/SDH (ADMs and terminals, metro MSPPs, and crossconnects), WDM (transport, ROADM, and long-haul submarine line terminating equipment), and packet-optical transport systems (P-OTS). The report also tracks the number of ports and revenue per port for WDM and SONET/SDH products by speed (Ethernet, SONET/SDH/POS, WDM), from below OC-48/STM-1 to 100G.

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