Weak
growth in the global optical components (OC) market in the first quarter of
2011 marked the start of a period of contraction for the sector, according to
Ovum.

In
a new market report, the independent telecoms analyst reveals that the OC
market grew by just one per cent sequentially in the first quarter of 2011,
reaching $1.59 billion. This weak growth is a sure sign that the torrid pace
set in 2010 has cooled significantly, says Ovum.

Furthermore,
Ovum’s vendor revenue guidance for the second quarter of 2011 shows that the
market could contract between two and eight per cent sequentially, an outlook
that if realised would mark the first sequential decline in two years.

Karen
Liu, Ovum analyst, commented that although the OC market grew by 27 per cent in
the first quarter of 2011 when compared to the same period last year, the
growth had slowed considerably.

The
sequential growth of one per cent is the smallest since the first quarter of
2009, and the year-on-year-growth is the smallest since the last quarter of
2009. This weaker growth is a reflection of the contraction that we believe
will come to light in the second quarter of this year,” said Karen Liu.

These
are sure signs that the OC market is slowing when compared to 2010. The market
returned to normal stable growth after the global recession, but the picture
for the second quarter of 2011 may be cause for concern as it could be a sign
that the market is about to recoil”.

In
terms of the segments that are causing the slowdown, our analysis shows
weakness in ROADMs and filters for the first time in six quarters. Sales of
transmission discretes were also down this quarter”.

“Meanwhile,
vendors such as Finisarhave cited weaker spending in China as a major factor
behind the slow sales, confirmed by our analysis of quarterly revenues from the
optical networking (ON) market. ON sales in China posted a 20 per cent
contraction, which pulled down the whole Asia-Pacific region,” Liu added.

By
Telecomlead.com Team
[email protected]