Equipment market revival as soon as 2010?

JULY 15, 2009 -- Infonetics expects recovery in 2010 for telecom/datacom equipment market, with Cisco, Alcatel-Lucent, and Ericsson leading the way.

JULY 15, 2009 -- Market research firm Infonetics Research (search Lightwave for Infonetics) released a new report, "Telecom and Datacom Network Equipment," which aggregates data from the many markets the firm tracks (the majority of the networking products in the telecom/datacom equipment industry) to provide a big picture of the health of the market.

"Though service provider capital expenditures are slightly decreasing in 2009 and 2010, spending is still on the rise for products that help carriers transform their networks. On the enterprise side, while companies of all sizes everywhere have been hit hard by the recession, they are in the middle of key network transformations of their own, which drive pockets of good growth," says Jeff Wilson, principal analyst at Infonetics. "Whether to save on operating expenses or to increase revenue, service providers and enterprises are investing in new network technology. The three segments showing the highest growth potential are IPTV and video equipment, broadband customer premise equipment, and subscriber data, policy, and service management software.

"We expect a mild contraction in the overall telecom and datacom equipment market in 2009 and a recovery between 2010 and 2011, followed by strong growth through 2013, when worldwide revenue will reach $195 billion," he adds.

Telecom and datacom equipment tracked by Infonetics Research grew 8% in 2008, with worldwide revenue totaling $150 billion, driven in large part by currency appreciation against the U.S. dollar. The two largest segments of the telecom/datacom market by revenue are (1) service provider mobile/wireless infrastructure and (2) enterprise router/switch/wireless LAN equipment.

Cisco leads the overall worldwide telecom/datacom network equipment market in 2008, followed by Alcatel-Lucent and Ericsson, which dominate the enterprise segment. The battle for service provider money rages on, with Ericsson maintaining its lead in the carrier network equipment segment in 2008, while Alcatel-Lucent and Nokia Siemens continue their neck-and-neck race for second. The biggest increases in revenue market share in the service provider network equipment market in 2008 were made by Samsung, ZTE, and Huawei.

Regionally, Asia Pacific, led by China and India, is forecast to increase its telecom/datacom revenue market share by five points from 2008 to 2013, taking from EMEA and North America.

Infonetics' telecom/datacom report compiles worldwide and regional market size, market share, and forecast data for market segments the firm covers (the majority of the networking products in the telecom/datacom equipment market) to assess the overall contribution of revenue by major product categories, geographic distribution of revenue, and leading vendors. Companies tracked include Alcatel-Lucent, Avaya, Cisco, Ericsson, Fujitsu, Huawei, Juniper, Motorola, NEC, Nokia Siemens, Nortel, Samsung, Tellabs, ZTE, and others.

The report tracks network hardware and software (not including consumer electronics) sold to service providers, cable companies, and small, medium, and large organizations.

Service provider hardware and software tracked includes:

  • broadband aggregation hardware (DSL, cable, PON, Ethernet FTTH)
  • broadband CPE
  • IPTV and IP video
  • optical network hardware
  • service provider VoIP and IMS equipment
  • carrier routing, switching, and metro Ethernet
  • service provider mobile/wireless infrastructure (WiMAX, femtocell, mobile network, FMC, LTE, microwave, satellite, PDH/NIU)
  • subscriber data/policy/service management software

Enterprise hardware and software includes:

  • enterprise routers, switches, and wireless LAN equipment, including WiFi phones and WAN optimization appliances
  • network security (IPSec, SSL VPN, network firewall, IDS/IPS, gateway content security, NAC)
  • enterprise telephony and unified communications equipment

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