Ovum-RHK’s preliminary analysis of 4Q06 results for optical networking equipment vendors reveals a 6% increase in revenues from the previous quarter and a 10% increase over the year-ago quarter.
Of the top vendors, Alcatel outdistanced the competition with a new high of $659 million in sales for a 20.1% share, say analysts. The newly merged Alcatel-Lucent became the first vendor to control more than 20% (24.2%) of the $11.9 billion annual optical market. Revenue for the company was up 5% sequentially and up 2% year-over-year due to Alcatel’s extremely strong performance in EMEA, most notably in WDM.
Huawei posted a 42% revenue increase over 3Q06 (23% over 4Q05) in what is traditionally a strong quarter for this competitor, say Ovum-RHK analysts. Huawei’s showing in EMEA and China was particularly strong.
Spending in the North American market slid below $1 billion for the first time since 4Q05 due to a pullback in spending from some of the largest buyers, most notably AT&T and its merged or merging entities-including Cingular and BellSouth-and Verizon. Vendors with dependence on these large North American carriers (e.g., Lucent, Siemens, and Tellabs) tended to fare worse than average in the quarter, say analysts. Only Fujitsu Network Communications weathered the quarter with only a slight decline despite its exposure.
Spending in EMEA was particularly strong in the quarter, topping $1.1 billion and outdoing expectations due to strong sales of multiservice SDH, metro WDM, and multireach (backbone) WDM gear. Vendors with good coverage across EMEA (e.g., Alcatel, Ericsson, and Huawei) tended to fare better than average in the quarter.
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