Optical network hardware market down 8% in first quarter

Market Wire, May, 2007

Quarter over quarter, the worldwide optical network hardware market is down 8% to $3 billion in 1Q07 from 4Q06, but is up 24% year-over-year, from 1Q06 to 1Q07, according to Infonetics Research's latest "Optical Network Hardware" report.

The down quarter was expected as SONET/SDH equipment makes up 61% of worldwide optical equipment sales and is steadily declining in share, while its replacement -- bandwidth-rich, more flexible WDM equipment -- continues to increase in share.

"The optical hardware market is stable, with a pattern of steady growth in WDM and slow decline in SONET/SDH after 2007, a trend we forecast in early 2006," said Michael Howard, principal analyst at Infonetics Research. "Many factors are driving service providers to spend on optical equipment, especially WDM equipment, including the need for more bandwidth for broadband and IP video, revenue-generating and opex-savings projects, and upgrades to metro and long haul networks. In addition, mergers and acquisitions resulting in the merging of large carrier networks need larger core capacities."

Market Highlights

--  Worldwide optical manufacturer revenue will grow incrementally to $12
    billion in 2010
--  SONET/SDH equipment sales are forecast to decline in the single digits
    each year from 2008 to 2010, while WDM equipment sales will increase in the
    single digits each year
--  Alcatel-Lucent continues to lead overall with 22% of worldwide optical
    network hardware revenue market share (dropped 2 points from 4Q06),
    followed by Huawei then Nortel
--  Siemens leads the fast-growing long haul ROADM switch market with 41%
    worldwide revenue share, followed by Infinera, then Alcatel-Lucent
--  Cisco leads the worldwide metro ROADM switch market, followed closely
    by Fujitsu
--  In 1Q07, 36% of all optical network hardware revenue came from EMEA,
    35% from North America, 24% from Asia Pacific, and  6% from CALA
    

Infonetics' report provides market share, market size, and forecasts for metro and long haul optical equipment, broken out by SONET/SDH vs. WDM, with transport and switch splits, DWDM and CWDM splits, and ROADM/non-ROADM splits. Forecasts and regional market share are updated quarterly and cover all regions.

The report tracks ADTRAN, ADVA Optical, Alcatel-Lucent, Ciena, Cisco, Corrigent, ECI Telecom, Ericsson, Fujitsu, Huawei, Infinera, Meriton, NEC, Nortel, Siemens, Tellabs, Transmode, Tropic, Turin, Zhone, ZTE, 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 and Co-Founder Infonetics Research 408-583-3351 Email Contact