For the first time in almost two years, quarterly global optical networking (ON) revenues were down year-over-year), according to Ovum. Sales in China and Europe also fell sequentially more than is typical, leading Huawei and Alcatel-Lucent to...
May 23, 2012
For the first time in almost two years, quarterly global optical networking (ON) revenues were down year-over-year), according to Ovum. Sales in China and Europe also fell sequentially more than is typical, leading Huawei and Alcatel-Lucent to post their worst global quarterly revenues since 3Q07 and 2005, respectively.
In a new market share analysis, the global analyst firm found revenues declined 9% from the year-ago quarter, while annualized spending retreated by $300m, or 2% sequentially, wiping out a third of the gains of 2011.
Sales also underperformed versus this period last year across all regions, with North America the “least bad” (down 8%, the smallest percentage in the last three quarters) and EMEA performing the worst (down 15%, the largest percentage in nearly two years).
Despite the findings, Ovum is still forecasting modest 4% growth this year to US$16.2 billion.
“Preliminary results for 1Q12 indicate more a cause for concern than a cause for panic,” says Dana Cooperson, practice leader of Ovum’s Network Infrastructure practice. “While 1Q sales are typically lower than 4Q sales, actual spending last year overshot our $14.9 billion forecast when results in Asia-Pacific and Europe were less negative than we predicted.”
In the network core, more vendors than in the past included data centre interconnect as a key driver of growth for their business and for use of 100G, control plane, and encryption features.
“However, mobile backhaul remains a ubiquitous growth driver at the network edge, with vendors noting the increasing speed of evolution from SONET/SDH to Ethernet/MPLS for aggregation and transport,” said Cooperson. “As 100G deployments grow, 40G deployments are holding steady.”