MELBOURNE, AUSTRALIA– Global optical networking (ON) spending versus the year-ago quarter grew decidedly for the first time in six quarters in 2Q13, according to global analyst firm Ovum. Results of US$4.08bn for 2Q13 were 29 percent higher than they were in 1Q13 and 7 percent higher than the year-ago quarter. Most significantly, annualized spending grew to US$14.9bn.
Vendor results were strong, led by the Chinese vendors. ZTE had its strongest quarter ever, solidifying its position behind Huawei as the second-ranked ON vendor. Annualized spending in Asia-Pacific, at over US$6bn, hit an all-time high. Demand in North America was also up significantly, benefitting Alcatel-Lucent, Cisco, Ciena, and Fujitsu. Growth in 100G remains a particular bright spot as annualized revenues exceeded US$1.6bn for the first time ever. Ovum is forecasting modest two percent growth this year to US$14.9bn.
In a new market share analysis*, Ovum reveals that strong sales in Asia-Pacific and North America mitigated weakness in EMEA and South & Central America, propelling the industry to its best quarter since 4Q11. The global industry analyst believes the market downturn that began in 1Q12 may finally be past in all regions except Europe, which is still showing signs of sluggishness.
“We always expect an uptick going into the second calendar quarter. However, sales of over US$4bn help dispel some of the fear generated by the slow start in 1Q13,” says Ron Kline, network infrastructure analyst at Ovum. “100G revenue growth is pumping a lot of enthusiasm— and revenue— into the market and increasing the revenues for converged packet optical (CPO) and optical transport network (OTN) switching gear.”
Product trends continue to show an accelerated movement to next-generation products. Annualized revenues for CPO gear surpassed US$6bn for in the quarter (42 percent of total ON spending) and 100G port shipments in 2Q13 grew 61 percent, surpassing US$1.6bn for the 4-quarter period. ROADM and OTN switching were also up strongly from the year-ago quarter. “We’ve been hearing operators say ‘no more SDH/SONET spending’ for years. This is misleading, because what they really mean is no more spending for platforms specific to just that technology. They are eager to deploy CPO products that provide Ethernet and SDH/SONET on a converged platform,” said Kline.
“2Q13 global ON revenue results are consistent with our most recent annual forecast published in February 2013. Ovum is projecting the optical networks market will exceed US$17.1bn by 2018, for a 2.7 percent CAGR from 2012. We project that all ON market regions will resume growth in 2013 except for EMEA; Ovum does not expect a big second half bounce to make up for the anemic first half in that region,” concludes Kline.
