The North American optical transport equipment market dropped 4 percent year-over-year (Y/Y) in the third quarter. Dell’Oro said that the North American and Latin American regions declined in the third quarter due to a mixture of issues: excess inventory, worsening macro-conditions, fear of recession, and higher borrowing costs.
Jimmy Yu, VP at Dell’Oro Group, said the North American market is still in what many industry observers call a digestion phase.“The market dynamics are different in North America than other parts of the world because the supply chain and component crises resulted in a run for optical equipment,” they said. “Then when component supply improved, service providers started to receive more equipment than they needed, creating a pause in new orders and requests to move out deliveries into 2024.”
However, demand for the market outside the North American region improved for a third consecutive quarter, growing 6 percent year-over-year.
“The market dynamics were different in other regions for varying reasons, such as Covid policies slowing economic growth in some countries and war in others. Hence, service providers in these countries did not build inventory in early 2023,” Yu said.
Ciena, FiberHome, and Nokia each gained more than one percentage point of market share in the trailing fourth quarter period compared to a year ago.
The research firm said the worldwide optical transport market is projected to grow at an average annual rate of 3 percent, reaching $16 billion by 2024.
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