Strong North American sales can't stop 3Q13 optical network market decline says Ovum

Nov. 21, 2013
Echoing the sentiments of other market research firms, Ovum reports that global spending on optical network equipment declined sequentially in the third quarter of this year. The downturn came despite a strong three months in the North American market.

Echoing the sentiments of other market research firms (see "Infonetics expects downturn in optical network hardware spending"), Ovum reports that global spending on optical network equipment declined sequentially in the third quarter of this year. The downturn came despite a strong three months in the North American market.

The quarter saw fiber-optic network systems sales of $3.7 billion, down 9% from the previous quarter (see “Optical hardware sales resume growth says Ovum”) and flat year-on-year. In fact, the optical network hardware market has only seen two quarters out of the last eight in which sales surpassed those of the year-ago quarter, Ovum says in its new “Market Share: 3Q13 Global ON” report.

Strength in North America wasn’t enough to offset weakness in Asia-Pacific, EMEA and South & Central America. Optical system sales in North America reached $1.1 billion in 3Q13, making the quarter the second consecutive three-month period to surpass the $1 billion mark. Sales of converged packet-optical transport systems and 100-Gbps technology led the way in North America. And companies with strong exposure to the North American market managed to increase revenues sequentially despite the overall downturn. Ovum cites Ciena, Fujitsu, and Infinera as three companies who rode strength in the region to higher sequential revenues, with Fujitsu enjoying its best revenue quarter since 1Q08.

Those looking for bright light amidst the darkness of the downturn should look toward converged packet-optical (CPO) and 100G, says an Ovum analyst.

“Total spending may be under pressure, but when it comes to deploying the latest infrastructure to support exploding bandwidth requirements, the demand for 100G, OTN, and packet switching capabilities provided by CPO gear continues to see strong growth among operators,” explains Ron Kline, principal analyst, network infrastructure at Ovum. “CPO has now reached a tipping point, representing greater than 50% of total [optical network] spending for the second consecutive quarter in 3Q13, a trend we expect to accelerate in 2014. This is just the beginning of the next upgrade cycle. The data center is the new central office, and operators are refreshing network technology to address changing traffic patterns as the steady march to IP continues.”

Although revenues from CPO equipment shrank for the first time in a year thanks to reduced spending in Asia-Pacific, annualized CPO sales exceeded $7 billion for the first time in 3Q13 Ovum says.

For more information on high-speed transmission systems and suppliers, visit the Lightwave Buyer’s Guide.

About the Author

Stephen Hardy | Editorial Director and Associate Publisher

Stephen Hardy has covered fiber optics for more than 15 years, and communications and technology for more than 30 years. He is responsible for establishing and executing Lightwave's editorial strategy across its digital magazine, website, newsletters, research and other information products. He has won multiple awards for his writing.

Contact Stephen to discuss:

  • Contributing editorial material to the Web site or digital magazine
  • The direction of a digital magazine issue, staff-written article, or event
  • Lightwave editorial attendance at industry events
  • Arranging a visit to Lightwave's offices
  • Coverage of announcements
  • General questions of an editorial nature

Sponsored Recommendations

Balanced vs. Unbalanced PON: Key Differences and Deployment Impact

Nov. 7, 2023
Learn how to choose the right PON architecture for your network.

The Pluggable Transceiver Revolution

May 30, 2024
Discover the revolution of pluggable transceivers in our upcoming webinar, where we delve into the advancements propelling 400G and 800G coherent optics. Learn how these innovations...

ON TOPIC: Innovation in Optical Components

July 2, 2024
Lightwave’s latest on-topic eBook, sponsored by Anritsu, will address innovation in optical components. The eBook looks at various topics, including PCIe (Peripheral...

ON TOPIC: Options for Next-Generation PON

Aug. 31, 2021
An increasing number of operators are looking at 10G PON as the next step in their fiber access evolution. But how long will 10G PON meet their requirements -- and are their other...