Huawei expands lead, Cisco shines in weak quarter for optical network equipment market

Boston, MASSACHUSETTS, November 15, 2011—Market research firm Infonetics Research today released excerpts from its third quarter 2011 (3Q11) Optical Network Hardware vendor market share report.

ANALYST NOTE

"Cisco posted a big sequential gain in optical equipment revenue (+46%), as did the vendors who sell into Japan, and WDM equipment sales were up in North America, but outside of this, Q3 was not a strong quarter for the optical network hardware market," observes Andrew Schmitt, directing analyst for optical for Infonetics Research. "A telltale sign of a capex slowdown is when purchases of advanced equipment (WDM) decline and legacy equipment (SDH) increase – this happened in the EMEA region (namely Europe), but not in North America. This is a key trend to watch for in 4Q11; if continued in EMEA this would be a strong negative leading indicator."

OPTICAL NETWORK HARDWARE HIGHLIGHTS

• While down sequentially, Huawei cemented its leadership position in the optical hardware market, with global revenue up 23% compared to the year-ago quarter
• The global optical network equipment market, including WDM and SDH/SONET equipment, dropped 4% sequentially in 3Q11, from $3.5 billion to $3.4 billion, on the heels of a 12% increase in 2Q11
• Rolling 12-month spending averages remain positive (despite the uptrend line being broken this quarter), and year-over year, from 3Q10 to 3Q11, the overall optical network equipment market is up 5%
• The bright spot of the quarter is WDM optical network equipment, global revenue for which is up 18% year-over-year (3Q10 to 3Q11)
• ROADM network equipment spending set a new high in 3Q11, up 4% sequentially, and shipments are up a stunning 43% for January through September 2011 compared to the same 9-month period last year
• North America posted modest quarter-over-quarter gains with good performances by Cisco, Nokia Siemens Networks, and ADVA
• Performance in Asia was a mixed bag with good results in Japan but relatively weak results in China for the overall optical market

REPORT SYNOPSIS

Infonetics’ quarterly Optical Network Hardware report tracks Adtran, ADVA, Alcatel-Lucent, BTI, Ciena, Cisco, ECI, Ericsson, Fujitsu, Huawei, Infinera, NEC, Nokia Siemens Networks, Nortel, Sycamore, Tellabs, Transmode, Tyco, ZTE, and others. The report provides worldwide and regional vendor market share, market size, and analysis (forecasts published Nov. 23). Equipment tracked: metro and long haul optical network equipment, including SONET/SDH (ADMs/terminals, metro MSPPs, crossconnects), WDM (transport, ROADM, long haul submarine line terminating equipment), and packet-optical transport systems (P-OTS). Also tracked: number of ports and revenue per port by speed (Ethernet, SONET/SDH/POS, WDM) from below OC48/STM1 to 100G. Regions: Asia Pacific (breakouts for China, Japan, India), CALA (Central America/Latin America), EMEA (Europe, Middle East, Africa), North America, and worldwide.

Clients: Join analyst Andrew Schmitt for his 3Q11 Optical Network Hardware market telebriefing on Tuesday, Dec. 6, 11:00 a.m. Eastern: http://www.infonetics.com/cgp/login.asp?id=465.

• Telecom capex up 6% to $311 billion in 2011, revenue up 8% to $1.86 trillion, driven by mobile broadband
• Operators name Ciena top optical equipment vendor in new survey
• White Paper: The 100G era is approaching fast as carriers ‘reboot’ their optical networks
• Optical transceiver market up 35% in 1H11 over 1H10; 100G ramp-up will be faster than 40G
• ROADM WSS component market contracts in 1H11, causing big vendor market share shift
• Optical network hardware gains 21% year-over-year in Q2, Huawei and ZTE surge
• OTN survey reveals huge shift in carrier plans for optical switching

UPCOMING OPTICAL RESEARCH

Download prospectuses, tables of contents, highlights, etc. at http://www.infonetics.com/login (see OPTICAL for 2011 and new 2012 services).

• 40G/100G Wavelength Deployment Strategies: Global Service Provider Survey
• OTN Market Outlook Report
• Q3 Optical Network Hardware Market Size, Forecasts, and Analysis Report

SALES

• Larry Howard, VP (West NA, APAC, CALA): larry@infonetics.com, +1 408-583-3335
• Scott Coyne, Sr. Account Dir. (East NA, Texas, Midwest): scott@infonetics.com, +1 408-583-3395
• George Stojsavljevic, Sr. Account Dir. (EMEA): george@infonetics.com, +44 755-488-1623
• Takashi Kimura, TAK Analytics, Sales (Japan): takashi.kimura@takanalytics.com, +81 3-6408-5566
• Hinton Information Services, Taiwan: www.hintoninfo.com.tw, +886-2-2799-3110 x220
• Doug Moon, MBAP Sales, Korea: dougm@mbap.co.kr, +82-2-3453-9400

Infonetics Research (www.infonetics.com) is an international market research and consulting firm serving the communications industry since 1990. A leader in defining and tracking emerging and established technologies in all world regions, Infonetics helps clients plan, strategize, and compete more effectively.

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