1Q21 was good – but don’t get used to it: LightCounting
The overall indicators for the communications market looked almost universally bright in the first quarter of this year, according to LightCounting’s June 2021 Quarterly Market Update. However, the market research firm says it expects those indicators to make a u-turn in this year’s second quarter.
As illustrated in the figure above, capex among communications services providers (CSPs) was the only indicator that didn’t show improvement in 1Q21 over the year-ago quarter. This came in spite of the fact that 9 of the Top 15 CSPs announced plans for capex increases in 2021, which would indicate some improvement is in the offing. However, LightCounting expects internet content provider (ICP) spending will have entered what the market research firm terms “another slower growth part of its cycle,” which may offset the CSP gains to a degree. In fact, Facebook However Facebook reduced its spending guidance for 2021 from $21 billion to $23 billion to $19 billion to $21 billion.
Meanwhile, LightCounting predicts sales of components will drop sharply year-over-year in the current quarter, based on flat guidance from component vendors and the fact that the second quarter of 2020 set revenue records.
Until the next edition of the Quarterly Market Update, the industry can bask in the results of the first quarter. Despite the downturn in CSP capex, telecom equipment vendors saw sales climb 10% compared to Q1 2020, with ADTRAN, ADVA, Ericsson, Fiberhome, Nokia, and ZTE reporting double-digit growth rates. Ciena and Infinera weren’t so lucky, with Ciena’s sales declining 7% and Infinera’s flat. Meanwhile, Huawei reported a decline in DWDM port shipments while several of its Western competitors saw upticks, a combination LightCounting believes shows the results of the Western backlash against the Chinese systems house.
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Stephen Hardy | Editorial Director and Associate Publisher, Lightwave
Stephen Hardy is editorial director and associate publisher of Lightwave and Broadband Technology Report, part of the Lighting & Technology Group at Endeavor Business Media. Stephen is responsible for establishing and executing editorial strategy across the both brands’ websites, email newsletters, events, and other information products. He has covered the fiber-optics space for more than 20 years, and communications and technology for more than 35 years. During his tenure, Lightwave has received awards from Folio: and the American Society of Business Press Editors (ASBPE) for editorial excellence. Prior to joining Lightwave in 1997, Stephen worked for Telecommunications magazine and the Journal of Electronic Defense.
Stephen has moderated panels at numerous events, including the Optica Executive Forum, ECOC, and SCTE Cable-Tec Expo. He also is program director for the Lightwave Innovation Reviews and the Diamond Technology Reviews.
He has written numerous articles in all aspects of optical communications and fiber-optic networks, including fiber to the home (FTTH), PON, optical components, DWDM, fiber cables, packet optical transport, optical transceivers, lasers, fiber optic testing, and more.
You can connect with Stephen on LinkedIn as well as Twitter.