Ciena, Infinera and NSN Gain Market Position in 1Q WW Optical Long Haul DWDM Market Segment

In Q1, 2013 the worldwide revenue for the Long Haul DWDM market dropped from its average quarterly run rate of approximately $1 billion to $782M, a precipitous drop of 26.3% over the previous quarter yet 22.1% higher on a year-to-year basis. Y-Y this is the highest performing segment within the optical market segmentation. The top five players accounted for 83.1% of the available Long Haul DWDM segment market; however, one major difference in the 1Q optical market performance is the ranking of the more pure play optical vendors over the more traditional multitechnology providers. In 4Q only Huawei and Alcatel-Lucent made the top five. In 1Q Ciena, Infinera and NSN (Coriant) all advanced at least one rank; Infinera gained two ranks. 

1Q/13 Worldwide Optical Long Haul DWDM Market
Company	Rank	Market Share
Huawei	1	29.7%
Ciena	2	16.7%
Infinera	3	13.1%
Alcatel-Lucent	4	12.5%
NSN (Coriant)	5	11.1%

Market Drivers and Forecast

In addition to its traditional role in Metro, Long Haul and mobile backhaul networks, the optical market, in general, is also gaining traction within cloud and data center networks. Optical vendors have integrated their classic SONET/SDH, DWDM and packet optical products to offer single hardware architecture with scalable platforms targeted for different network deployment points that effectively maximize the solution for their installed bases. The more pure play optical vendors are also increasingly enhancing and adding to their transport capabilities with features such as fast rerouting and adding level 2.5 protocol support such as MPLS to climb the stack. These features help with network resiliency and provide more functionally and service deployment options to a carrier.

100G WDM is becoming the de-facto standard for Long Haul transport, driven by the need to support multiple 10G and 40G subscriber connections. The optical vendors are already working on ways to combine multiple 100G long haul connections to form super channels that will enable transport rates into the half terabit and ultimately full terabit line rates. This should better position the optical transport solutions against router technology, which is more expensive for higher speed interfaces.

With the demand for bandwidth continuing to increase and optical vendors adding value to their platforms to become better transport enabled, AGC predicts the Long Haul DWDM optical market segment will continue to grow 20–25% in 2013. 

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         Jeff Ogle
jogle@acgresearch.net   
    www.acgresearch