Optical network equipment market down 4 pc in 3Q11

BOSTON, USA: The global optical network equipment market, including WDM and SDH/SONET equipment, dropped four per cent sequentially in 3Q11, from $3.5 billion to $3.4 billion, on the heels of a 12 per cent increase in 2Q11, finds market research firm Infonetics Research.

In its third quarter 2011 (3Q11) Optical Network Hardware vendor market share report, the analytics firm also finds that rolling 12-month spending averages remain positive (despite the uptrend line being broken this quarter), and year-over year, from 3Q10 to 3Q11, the overall optical network equipment market is up five per cent.

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"Cisco posted a big sequential gain in optical equipment revenue (+46 per cent), as did the vendors who sell into Japan, and WDM equipment sales were up in North America, but outside of this, Q3 was not a strong quarter for the optical network hardware market," observes Andrew Schmitt, directing analyst for optical for Infonetics Research.

While down sequentially, Huawei cemented its leadership position in the optical hardware market, with global revenue up 23 per cent compared to the year-ago quarter.

North America posted modest quarter-over-quarter gains with good performances by Cisco, Nokia Siemens Networks, and ADVA.

"A telltale sign of a capex slowdown is when purchases of advanced equipment (WDM) decline and legacy equipment (SDH) increase - this happened in the EMEA region (namely Europe), but not in North America. This is a key trend to watch for in 4Q11; if continued in EMEA this would be a strong negative leading indicator."

Infonetics also finds that the bright spot of the quarter is WDM optical network equipment, global revenue for which is up 18 per cent year-over-year (3Q10 to 3Q11).

ROADM network equipment spending set a new high in 3Q11, up four per cent sequentially, and shipments are up a stunning 43 per cent for January through September 2011 compared to the same nine-month period last year.

Performance in Asia was a mixed bag with good results in Japan but relatively weak results in China for the overall optical market.