Optical network hardware and carrier router and switch sales up in 3Q06

Market Wire, November, 2006

Worldwide optical network hardware revenue increased 4% between the second and third quarter of 2006, reaching $3.1 billion in 3Q06, according to Infonetics Research's latest Optical Network Hardware report.

The market is forecast to grow 9% between 2005 and 2006, and will reach $11.8 billion in 2009.

"The optical hardware market has stabilized, with a likely pattern of slow growth in WDM and a slow decline in SONET/SDH after 2007. The overall market will continue steady growth, driven by the ever-increasing bandwidth use by consumers and businesses for video applications, mobile traffic, broadband, and IPTV," said Infonetics Research's co-founder, Michael Howard.

3Q06 Optical Network Hardware Highlights

--  Alcatel had a blockbuster quarter, up 27% in 3Q06, maintaining its
    leadership in worldwide optical network hardware revenue, followed by
    Nortel, Huawei, and Lucent
--  Tellabs holds the lead in 3Q06 worldwide SONET revenue market share,
    followed by Fujitsu, Lucent, and Nortel
--  WDM ROADM switch hardware sales make up 31% of all WDM sales, and are
    projected to increase to 38% of the total by 2009
--  Metro equipment makes up 65% of all optical network hardware revenue,
    long haul 35%
--  35% of worldwide optical network hardware sales come from North
    America, 33% from EMEA, 26% from Asia Pacific, and 6% from CALA
    

According to another Infonetics report, Service Provider Routers and Switches, the worldwide service provider router and switch market -- which includes carrier Ethernet switches, IP core and edge routers, enterprise-class Ethernet switches, and multiservice core and edge ATM switches -- is up 2% to $2.4 billion in 3Q06.

Infonetics expects the overall market to reach $12.3 billion in 2009, a 71% increase from 2005.

"IP traffic continues to grow strongly, often anecdotally cited by carriers as increasing 50% to 100% each year, with broadband and IP VPN traffic underlying that growth. Service providers are experiencing faster traffic growth as they deploy IP video (including IPTV) in their networks. IP and carrier Ethernet switch and router sales continue to climb, while multiservice ATM switch sales continue to decline (down 20% this quarter)," Michael Howard added.

3Q06 Service Provider Router and Switch Highlights

--  Cisco increased its lead in the overall service provider router and
    switch market, with 50% of worldwide revenue in 3Q06, followed by Juniper
    and Alcatel
--  Carrier Ethernet switch and router (CESR) sales are up 10% to $1.28
    billion in 3Q06, with annual sales expected to increase 269% between 2005
    and 2009
--  Worldwide IP core and edge router sales are up 4%
--  66% of worldwide service provider router and switch sales come from
    routers, 20% from carrier Ethernet switches, 13% from multiservice ATM
    switches, and 1% from enterprise-class Ethernet switches
--  39% of all service provider router and switch revenue comes from North
    America, 31% from EMEA, 24% from Asia Pacific, and 5% from CALA
    

Infonetics' Optical Network Hardware report provides market share, market size and forecasts for metro and long haul SONET/SDH, WDM transport, and WDM switch (broken out by ROADM and non-ROADM) hardware. ADTRAN, ADVA/ Movaz, Alcatel, Ciena, Cisco, Corrigent, ECI Telecom, Ericsson/Marconi, Fujitsu, Huawei, Infinera, Lucent, Meriton, NEC, Nortel, Siemens, Tellabs, Transmode, Tropic, Turin, Zhone, ZTE, and others are tracked in the report.

Infonetics' Service Provider Routers and Switches report provides market share, market size, and forecasts for IP core and edge routers, multiservice core and edge ATM switches, enterprise-class Ethernet switches, and carrier Ethernet switches and routers. The report tracks Alcatel, Avici, Ciena, Cisco, Ericsson/Marconi, Fujitsu, Huawei, Juniper, Lucent/Riverstone, NEC, Nortel, Redback, Tellabs, and others.

Download sample data at www.info.infonetics.com . For sales, contact Larry Howard, vice president, at larry@infonetics.com or 1 (408) 583-3335.

Infonetics Research ( www.infonetics.com ) is the premier international market research and consulting firm specializing in data networking and telecom. Services include quarterly market share and forecasting, end-user survey research, service provider survey research, and service provider capex analysis.

Press Contact: Michael Howard Principal Analyst Co-Founder Infonetics Research (408) 583-3351 Email Contact