Cloud, long haul drive 13% growth in optical comms sales

31 May 2016

Following its acquisition of Alcatel-Lucent, Nokia debuts at #2, behind Chinese giant Huawei.

Worldwide optical network equipment spending was down 12% sequentially in the first quarter of 2016, reflecting a typical seasonal adjustment for the industry. However, the market achieved a 13% year-over-year increase that was anchored by accelerating 100G investment in long haul and metro applications.

These are the headline conclusions of the latest market report published by analyst IHS Infonetics.

Long haul wavelength-division multiplexing spending was strong in the first quarter of 2016, growing 23% year-on-year. The 100G long haul market continues to be robust, commented IHS, with new projects in China and North America already underway and delivering significant revenue. Several vendors have noted that they see no letup in 100G long haul demand.

Sales of Metro WDM equipment saw solid gains in Q1 2016 as well, with an increase of 15% over the year-ago quarter. Data center expansion, public and private cloud adoption, preparation for broader introduction of 4K video and emerging virtual reality applications are expected to continue to drive the growth of bandwidth in the metro, the analyst commented.

However, considering optical communications technologies that appear to be on the wane, the IHS report says synchronous optical networking and synchronous digital hierarchy spending continues to decline, representing just 11% of the total optical equipment market in Q1 2016.

Other report highlights

• Nokia debuted as the number-two optical equipment manufacturer, behind leader Huawei.
• The first quarter of 2016 (Q1 2016) marked Nokia’s re-entry into the optical equipment market, this time anchored by the former Alcatel-Lucent’s optical network business.
• Asia Pacific remained the largest consumer of optical hardware in Q1 2016, representing close to 40% of overall market spend.
• Optical equipment spending in EMEA (Europe, Middle East, Africa) remained cautious in Q1 2016—declining 19% sequentially, but up 2% from the year-ago quarter (Q1 2015) — setting the stage for additional growth in 2016.

Synopsis

The IHS Optical Network Hardware Quarterly Market Tracker tracks the global market for metro and long haul WDM and SONET/SDH equipment, Ethernet optical ports, SONET/SDH ports and WDM ports. The report provides market size, market share, forecasts through 2020, analysis and trends. Vendors tracked include Adtran, ADVA, Ciena, Cisco, Coriant, Cyan, ECI, Fujitsu, Huawei, Infinera, NEC, Nokia (Alcatel-Lucent), Padtec, TE Connectivity, ZTE and others.