MARCH 24, 2008 -- Ovum RHK (search for Ovum RHK) has released its preliminary analysis of fourth quarter 2007 results for optical component vendors. The optical component market overall finished the year strong, with quarterly revenues of $1.1 billion, up 3% sequentially and 4% versus 4Q06, say Ovum RHK analysts. Full-year 2007 topped $4.0 billion, up 4% compared to 2006.
According to Daryl Inniss, vice president and practice leader for Communications Components at Ovum RHK, inventory effects are still impacting revenue growth, although the impact is not as strong as experienced in the first half of 2007.
"We still believe that market conditions are positive up the food chain," Inniss contends. "Traffic growth--dominated by IP data--continues, and traffic demand from wide-scale demand for video is yet to come. Equipment vendors in all segments are reporting strong revenue gains, another indicator that the market is continuing to expand," he continues. "However, a North American recession and the impending credit crunch can negatively impact telecommunications market expansion, particularly in 2H08."
Ovum RHK's 4Q07 revenue and share highlights for optical component market's top ten vendors include the following:
• Of the top ten vendors, MRV (Luminent), Finisar, and Optium all achieved double-digit sequential revenue growth (15%, 13%, and 12%, respectively).
• Intel rebounded from a weak third quarter with sequential growth of nearly 30% in 4Q07.
• Opnext, one of the few vendors unscathed by the inventory reductions that plagued 1H07, experienced its first down quarter since early 2006. Opnext revenues were down 13% sequentially but were still good enough for an 8% increase over 4Q06.
• MRV (Luminent) and Oplink, the vendors with the largest revenue increase over 4Q06, were this quarter's largest rolling 4Q share gainers. Both vendors' share gains come principally from acquisitions--Fiberxon for MRV (Luminent) and OCP for Oplink.
• The share gains by Sumitomo and Optium are impressive because they appear to be organically derived, say Ovum RHK analysts. One might argue that Optium's growth was based on its acquisition of Engana and Kailight, but the revenues of these entities were essentially zero at the time of the acquisition. For Sumitomo, its growth may be attributed, in part, to its introduction of an SFP+ transceiver.
• JDSU, who was hit hard by the inventory correction in 1H07, posted the largest share loss (-.2%) despite posting a strong quarter.
• Optium, after gaining share the past two quarters, displaced Furukawa from the number ten spot.
Full 4Q07 results and analysis will be published in Ovum's Optical Components advisory service.
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