Optical networking equipment market dips 2% to $3.1 bn in Q1: Ovum

The optical networking (ON) equipment market size dipped 2 percent to $3.1 billion in the first quarter of 2014, said Ovum.

ON spending has increased in North America, while Ovum noted double-digit quarterly declines in other regions such as EMEA, SCA, and Asia-Pacific. For instance, ON sales in EMEA fell to $682 million, said Ovum.

In 2014, the ON market is likely to grow 4.6 percent. Market spending continues to fluctuate regionally out of phase by quarter, resulting in sluggish growth on a global level. Vendors with stronger exposure to North America did well in Q1 2014, said Ovum.

Cisco and Infinera posted both quarter-over-quarter and year-over-year revenue gains.

ON revenues of Ciena, Alcatel-Lucent, ZTE, and FiberHome dipped sequentially but increased year-on-year.

Coriant, Ericsson, Fujitsu, and Huawei ON revenue decreased as compared to their year-ago revenue levels.

Application segments continue upward trend. Spending versus Q1 2013 for CPO, ROADM, 100G, and OTN switching increased by double digits again in Q1 2014. Annualized CPO sales for Q1 2014 are nearly $7.8bn, more than half of all ON spending.

Data center interconnect and 100G are increasing demand for optical. Ovum’s newest forecast, published in May 2014, predicted 4.6 percent growth in 2014.

Ovum expects the ON market to exceed $19 billion by 2019, growing 5.1 percent cumulatively from 2013. Despite a slow start, we see market growth picking up again, starting 2Q14.

Ron Kline, principal analyst, Intelligent Networks at Ovum, said: “Backhaul requirements for growing LTE and GPON deployments in the access network are also increasing demand for optical; 2014 is shaping up to be a very exciting year as metro-optimized 100G and adaptable-rate flex-spectrum 200G/400G linecards enter the market.”

TelecomLead News Team