Optical networking market to show 'modest' recovery in 2003
30 August 2002 -- Following a 28% decline in the market for optical networking systems in 2001, the market will decline sharply again in 2002 but "sluggish" growth will resume in 2003, according to analyst KMI.
30 August 2002 -- Following a 28% decline in the market for optical networking systems in 2001, the market will decline sharply again in 2002, according to KMI's new report, Optical Networking Equipment, 2001-2003: Market Update. KMI analysis indicates the market will hit bottom this year, and growth will resume in 2003, albeit at a sluggish pace.
The report covers the market value of terrestrial fiberoptic transmission systems, including SONET-SDH transport (and the "next-generation" segment), digital cross-connects (DXCs), dense wavelength-division multiplexing (DWDM), and optical cross-connects (OXCs).
The data is segmented for major geographic regions and for both long-haul and short-distance (metro/access) applications. In addition to in-depth interviews with optical equipment manufacturers, the KMI forecast was based on a unique web-based survey that attracted 236 responses from carriers worldwide on their plans for procuring
Considering DWDM transport equipment and OXCs, KMI reports that "Equipment vendors are facing a tough year, with revenues off by more 50% from the first six months of 2001 to the first six months of 2002.
"While bandwidth demand continues at a healthy pace, carrier revenues are not keeping pace, and their capital expenditures are constrained. Nevertheless, over the next year carriers will be experiencing historically high levels of capacity utilization on their networks that will require them to install new DWDM systems and to improve network utilization with OXCs."
KMI's carrier survey showed that about two-thirds of service providers intend to award new DWDM and OXC contracts before the end of 2003, with most awarding new contracts in the first half of 2003.
The recovery in 2003 will be modest. The consolidation of service providers will continue into 2003, while the shake-out among optical-equipment vendors has barely started, the analyst believes.
Despite the overall market decline in 2002, the KMI report identifies pockets of opportunity for certain products, geographic regions, and applications. Optical Networking Equipment, 2001-2003: Market Update also details carrier feedback on important features in DWDM and OXC products, as well as how and when they will deploy this equipment in their networks.
* What were the market shares of major optical-networking equipment vendors in 2001 and what is happening to their business in 2002?
* What is happening to key drivers for optical equipment demand: carrier capital expenditures and bandwidth demand?
* When will carriers issue new contracts for optical equipment and what is the market outlook in 2002 and 2003?
* When purchasing OXCs and DWDM, what features do carriers find most important?
Optical Networking Equipment, 2001-2003: Market Update, August 2002 100 pages, 65 tables, 31 figures format: Electronic (PDF). Price: USD2,500. To view the report brochure, visit www.kmicorp.com/fiberoptics_market_studies/optical_networking_ equip
To buy the report, visit store.yahoo.com/kmiresearch/opneteq20mar