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...Home ... Editorial ... News ..News Story Tuesday: December 28, 2010


Optical Hardware Market Sets Torrid Pace


3/28/2005 -- Even though Gigabit Ethernet and wireless continue to snag the lion’s share of industry headlines, the worldwide optical network hardware market is doing just fine, thank you. In fact, market watcher Infonetics Research recently found that optical network hardware revenues grew by more than one-fifth (21 percent) between the third and fourth quarters of 2004, cresting at $2.6 billion.

That translates into a bonanza of sorts for optical players Alcatel, Cisco, Lucent, Marconi and Nortel, which all had strong quarters, Infonetics says, by capital expense splurging among service providers.

For the year, worldwide optical network hardware revenues grew by 10 percent between 2003 and 2004, reaching $9 billion. What’s more, Infonetics projects similar growth through 2008. Drilling down into the global optical networking hardware market, Infonetics found that one market segment, in particular, is growing at a torrid pace.

“Metro WDM optical equipment is on fire,” said Michael Howard, principal analyst of Infonetics Research, in a statement. “Worldwide revenue topped $380 million in 4Q04, a 30 percent increase from [the third quarter of 2004]. Nearly every metro WDM manufacturer had a good-to-great quarter. Service providers are depending more and more on DWDM and CWDM for a range of access applications, and are starting to build more metro rings, increasing their dependence on WDM as the eventual basic metro transport layer. ROADM technology will further facilitate this trend.”

The optical space is one of the few markets in which networking kingpin Cisco doesn’t dominate. True to form, Alcatel once again set the pace in the worldwide optical network hardware market, both for Q4 of 2004 as well as for the year, followed by Nortel, Huawei and Fujitsu, Infonetics found. In North America, Nortel is the market leader (along with Tellabs), with Alcatel tops in the EMEA, and Huawei (not surprisingly) dominating in Asia-Pac.

In the optical market itself, metro accounted for 74 percent of all hardware revenue in Q4. SONET/SDH remains the most prevalent optical technology on a worldwide basis, accounting for 69 percent of optical equipment sales in the fourth quarter, with 85 percent of this total in metro SONET/SDH.

If metro is sizzling, long haul is fizzling, down 13 percent for the year, with long-haul SONET/SDH down 16 percent and long-haul WDM down 10 percent.

This year, Infonetics researchers say, WDM and intelligent SONET/SDH should grow slowly, both as a result of better business conditions, and also because of pressures to reduce operating expenses.  -Stephen Swoyer



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