Infonetics: Resilient Asian optical network hardware market headed for slowdown

APRIL 26, 2010 -- Despite the economic recession, optical network hardware revenue grew 5% in Asia Pacific in 2009, led by China, compared with 24% and 21% declines in EMEA and a North America, respectively, according to the 2010 edition of Infonetics Research’s Optical Network Hardware in Asia Pacific report. That’s the good news. The bad news is that slowing quarterly growth dipped into negative territory in the fourth quarter of 2009, which likely marks the beginning of a decline in the region’s demand for optical equipment.

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APRIL 26, 2010 -- Despite the economic recession, optical network hardware revenue grew 5% in Asia Pacific in 2009, led by China, compared with 24% and 21% declines in EMEA and a North America, respectively, according to the 2010 edition of Infonetics Research’s Optical Network Hardware in Asia Pacific report. That’s the good news. The bad news is that slowing quarterly growth dipped into negative territory in the fourth quarter of 2009, which likely marks the beginning of a decline in the region’s demand for optical equipment.

Two primary factors signal a slowdown in the Asia Pacific optical network hardware market, according to the report. First, Chinese carriers say that their 2010 spending will be constrained. Second, the loose lending practices that have prevailed in Asia Pacific in recent years likely will end, Infonetics believes.

“Chinese service providers purchase nearly half of all optical equipment in Asia, and Huawei ships nearly half of all equipment sold in the region. Unlike some of their other businesses, Huawei's optical business is heavily leveraged in their domestic market," notes Andrew Schmitt, Infonetics Research's directing analyst for optical.

India will gain share of the optical network hardware market through 2014, predicts Infonetics, while China, Japan, and Korea will lose proportionate share

Infonetics’ Optical Network Hardware in Asia Pacific report tracks SDH and WDM optical hardware for metro and long-haul networks sold by vendors in China, Japan, India, Republic of Korea, the rest of Asia Pacific (including Australia, Singapore, Indonesia, Malaysia, and Taiwan), plus the total Asia Pacific region. The service provides market share, market size, and forecasts through 2014 by country and region.

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