Optical Networking 1Q WW Results

The Optical Networking worldwide market revenue dropped 22 percent quarter over quarter. This drop mirrors last year’s performance and seems to have become a seasonal pattern for this industry segment. If Q2 follows a similar pattern the overall industry will be positioned to achieve a year-over-year growth rate in the low single digits. Although this growth is positive news for the industry, the vendor level isn’t so rosy and reveals a different story.

On a percentage revenue basis for quarter-over-quarter performance, the vendor community ranged from a high of +43.5 percent to a low of -41 percent. The wide range of performance drove a major reshuffling within the ranks of the top 10 vendors and throughout the subsegments as well. This is generally an indication of fierce competition and more importantly points to the probability that some vendors are gaining market share at the expense of their competitors. The Optical segment also had a major spin off and IPO during Q1, an indication that at least for these organizations they believe there is long-term revenue and growth opportunity within the Optical Networking segment.

Within the optical technology segments the ranked order remained the same from a revenue generation standpoint with Long Haul DWDM, Metro WDM and MSPP generating 83.5% of the total optical market revenue. The first two are experiencing double-digit year-over-year growth, but the MSPP segment has experienced double-digit decline on both a quarter-over-quarter and year-over-year basis. Regionally, North America became the number one region in 1Q; deployments within Tier 2 and 3 service providers drove this growth.

For more information about ACG Research’s optical services, contact sales@acgresearch.net.

         Jeff Ogle

jogle@acgresearch.net

     www.acgresearch