Optical networking market tops $3 billion for 7th consecutive quarter

Spending in North America tops all other regions

For immediate release, 13 May 2008. Ovum today announced its preliminary quarterly results for global optical equipment networking vendors. The global optical networking (ON) market topped $3 billion for the seventh consecutive quarter after an exceptionally strong showing in 4Q07, dropping 12% sequentially but gaining 23% year-over-year. "The sequential decline, particularly after a super-hot 4Q07, was expected, while the strong growth over 1Q07 points to continued strength in spending for ON gear used for consolidating disparate services onto a single network and supporting growth in broadband consumer and enterprise services," remarks Ovum's VP Optical Networking, Dana Cooperson. "The trends we've been following for at least the past year - the increasing fraction of ON spending dedicated to metro WDM, the shift in end-to-end solutions marketing (if not purchasing), growing investment in undersea capacity, the growing addressable market for ON gear as emerging markets and alternative network builders take out their wallets, network evolution built on more packet-capable, agile, and resilient networks - remain powerful forces for market growth and spending shifts. Of the top ten vendors, Ciena, Fujitsu, NEC, and Tellabs all posted positive sequential and year-over-year results; Alcatel-Lucent and Huawei both followed strong 4Q07 results with expected sequential declines; and only Nortel posted both sequential and year-over-year declines."

Regional and product segment highlights

Spending in North America topped all other regions, with just over $1.3 billion for the quarter. While all regions posted growth over 1Q07, only North America exceeded 4Q07 spending. "Both Fujitsu and NEC both got a positive boost from a strong Japanese market, the words 'strong' and 'Japanese market' not having been side by side in many a quarter," noted Cooperson. Next-gen SDH/SONET maintained its position as the single largest segment, with $1.5 billion in global spending, but metro WDM, with quarterly spending of nearly $900 million, continues to grow at a faster pace and add to its heft as the second-biggest segment.  

Top ten ON vendors

Table 1 highlights top ten vendor performance for the quarter.

Table 1 Global ON market shares for top ten vendors, 1Q08

Vendor	1Q08 market share	4Q07 market share	Change from previous	Rolling 4Q share	Change from previous
Alcatel-Lucent	20.0%	25.2%	-5.2%	23.1%	-0.3%
Ciena	4.8%	4.0%	0.8%	4.3%	0.2%
Cisco	5.0%	4.6%	0.4%	4.8%	-0.1%
Ericsson	5.1%	4.8%	0.3%	5.2%	-0.2%
Fujitsu	8.1%	4.5%	3.5%	6.1%	0.2%
Huawei	14.3%	18.0%	-3.7%	15.1%	0.7%
NEC	5.5%	4.5%	1.0%	4.9%	0.2%
Nokia Siemens Networks	6.2%	5.7%	0.5%	5.7%	0.0%
Nortel	6.3%	7.5%	-1.2%	7.4%	-0.5%
Tellabs	6.3%	3.8%	2.5%	5.2%	-0.1%
Top 10	81.6%	82.6%	-1.1%	81.9%	0.0%

Source: Ovum

- Ends -

For further information:

Full results and analysis of Q108 Optical Networking market share will be published in Ovum's Optical Networking Advisory Service. For more information or to speak with Dana Cooperson about these quarterly ON results, please contact us at prteam@ovum.com or contact a member of the global PR team listed below.

About Ovum:

Ovum is a global advisory and consulting firm. Its primary activity is providing value-added advisory services and consulting to retained and project clients. The company acts as a well-respected and trusted source of industry data, knowledge and expertise on the commercial impact of technology, regulatory and market changes. Ovum engages in continuous research and industry analysis to determine market dynamics in its specialist sectors.

Ovum has developed long-standing relationships with many of its corporate clients, which include major international blue-chip companies such as Alcatel-Lucent, AT&T, BT, Cisco Systems, Deutsche Telekom, Fujitsu, HP, IBM, Microsoft, Telstra and Vodafone.

Ovum is part of the Datamonitor Group.

Ovum's global PR contacts:

North America:
Sara Kaufman
Tel: +1 617-722-4602
Email: sara.kaufman@ovum.com

EMEA:
Maria Di Martino
Tel: +44 (0) 20 7551 9238
Email: maria.dimartino@ovum.com

Asia-Pacific:
Tanisha Kuckreja
Tel: +61 3 9601 6723
Email: tanisha.kuckreja@ovum.com