12/8/2009 -- For those inclined to optimism, the latest developments in the optical networking segment offer something of a mixed bag.

For one thing, optical sales "inched up" this year, thanks in part to the efforts of market powerhouses Huawei and Alcatel-Lucent.

That's according to market watcher Infonetics Research, which -- leavening the good with the bad -- reports that both Huawei and Alcatel-Lucent turned in subpar performances in Q3, effectively driving global optical sales down for the quarter.

One bright spot was the North America market, which managed to eke out a small gain (on the order of 4 percent) during the survey period, according to Infonetics.

North America is the optical segment in which Cisco Systems Inc. is strongest. It's also a space that, thanks to several prevailing trends, is best-positioned for optical growth.

"While the overall optical network hardware market dipped in the third quarter, led by slight declines by heavy hitters Huawei and Alcatel-Lucent, the North American market inched up again, a trend we expect to continue," said Andrew Schmitt, directing analyst for optical at Infonetics, in a statement. "The other major regions were down this quarter, although we expect a strong fourth quarter across the board. Asia is at risk for a liquidity-related 'Black Swan' event if the loose lending comes to an end, but the region is on track to overtake all others as the largest optical network hardware market in 2009 and well into the future, albeit at a slowing growth rate."

Alcatel-Lucent remains athwart the long haul optical heap, but China-based Huawei is coming on strong. It's grown its revenue share by 80 percent over the last two years (Alcatel-Lucent actually lost a point of share during the same period).

Elsewhere, Infonetics reported, Infinera outstripped both Ericsson and Nortel in the long haul segment during Q3, while Cisco, Fujitsu, Tellabs and Alcatel-Lucent report strong demand for packet optical transport system (P-OTS) gear in North America.

Finally, Infonetics said, demand for next-generation WDM optical equipment revenue grew by 7 percent between Q2 and Q3, suggesting that service providers are ramping up "forward-looking infrastructure plans." --Stephen Swoyer