Optical Hardware Market Down, But That's OK
June 7, 2005
By Dan Muse
Don't panic, says Infonetics Research. The San Jose, Calif.-based firm reports that worldwide optical network hardware revenue decreased 10 percent to $2.3 billion for the first quarter of 2005. However, it said the drop that was anticipated after the market surged 21 percent between the third and fourth quarter last year, according to the Optical Network Hardware report, which tracks SONET/SDH and CWDM/DWDM sales.
Infonetics said that many manufacturers are often down in the first quarter of the year
after showing big gains in the fourth quarter. A case is point is market-leader Alcatel, which posted big gains in the fourth quarter of 2004, but dropped 46 percent in the first quarter of 2005. However, while many manufacturers also had down quarters, others experienced gains. Those include Adva, Cisco, Ciena, ECI, Fujitsu, NEC and Siemens.
Overall, for 2005, Infonetics forecasts annual optical network hardware revenue to increase
4 percent with 16 percent growth between 2005 and 2008. The research firm expects the strongest growth to come
from metro WDM optical equipment, which will increase 60 percent between 2005 and 2008. The metro WDM switch segment is especially strong, and will jump 247 percent by 2008, according to Infonetics.
"We expect worldwide optical revenue to hit the $10 billion range by 2008, a five-year compound annual growth rate in the mid single digits, as we see a steady healthy optical market driven by the undeniable onward push of bandwidth use by consumers and businesses," Michael Howard, principal analyst of Infonetics Research and author of the report, said in a statement.
Infonetics said first quarter 2005 highlights include the following:
Alcatel continues its strong lead in worldwide total optical network
hardware revenue market share, despite a down first quarter
Nortel is second, followed closely by Fujitsu, which
overtook fourth-place Huawei this quarter in large part due to
Fujitsu's huge gains in the Asia Pacific market (where Fujitsu now
leads)
Metro makes up 74 percent of all optical network hardware revenue, out-distancing long
haul (26 percent)
The EMEA region accounts for 35 percent of optical network hardware revenue,
North America and Asia Pacific each for 30 percent
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