Infonetics: Optical Network Hardware Market set to Rise after Mixed 1st Quarter

Market research firm Infonetics Research has released its first quarter 2011 (1Q11) Optical Network Hardware vendor market share report, which finds that the optical network market will experience modest growth this year after a mixed 1Q11.  Highlights from the report:

  The global optical network equipment market, including WDM and SDH/SONET equipment, saw a typical seasonal decline in 1Q11, down 12%, following a 10% increase in 4Q10
.    Year-over-year, from the first quarter of 2010 to the first quarter of 2011, WDM optical network equipment spending is up 20% and the overall optical market is up 7%
.    Optical network hardware vendors that are Japan- and North America-centric did well in 1Q11, including Ciena, Cisco, Fujitsu, and NEC, all posting single- or double-digit gains
.    Meanwhile, most other vendors posted slight to significant revenue declines, including market leaders Alcatel-Lucent and Huawei
.    North America optical spending held steady in 1Q11 over 4Q10, bucking normal seasonal trends
.    Optical equipment spending is up year-over-year in all regions except Asia Pacific
.    ROADM spending set another new high in 1Q11, shrugging off seasonal spending patterns to rise 4% sequentially

 “There is concern in the optical industry about the outlook for 2011, but we feel our single digit growth forecasts for 2011 are achievable. Optical equipment for mobile and broadband backhaul is in demand, and carriers are embarking on a multi-year ‘optical reboot’ to 40Gbs/100Gbs transmission over OTN and ROADM based networks. Vendors who service the growing WDM and packet-optical sector should do well, while vendors leveraged to legacy SONET/SDH will not,” foresees Andrew Schmitt , Infonetics Research’s directing analyst for optical.

Here’s a link to a sample chart from this report:

The report tracks optical network vendors, including Adtran, ADVA, Alcatel-Lucent, BTI, Ciena, Cisco, ECI, Ericsson, Fujitsu, Huawei, Infinera, NEC, Nokia Siemens Networks, Nortel, Sycamore, Tellabs, Transmode, Tyco, ZTE, and others. Worldwide and regional vendor market share, market size, and analysis are covered in the report (1Q11 analysis and forecasts will be published by May 26).

Equipment tracked: metro and long haul optical network equipment, including SONET/SDH (ADMs and terminals, metro MSPPs and crossconnects), WDM (transport, ROADM, and long haul submarine line terminating equipment), and packet-optical transport systems (P-OTS). Also tracked: number of ports and revenue per port by speed (Ethernet, SONET/SDH/POS, WDM), from below OC48/STM1 to 100G. Regions tracked: Asia Pacific (with breakouts for China , Japan , India ), Central and Latin America (CALA), EMEA (Europe, Middle East, Africa), North America , and worldwide.

A related Infonetics report on the OTN market is described and analyzed at:

Categories and Definitions
◆ SONET/SDH: ADMs and MSPPs and crossconnects that attach to SONET/SDH rings and/or provide DCS functions
◆ WDM: Transport + ROADM
• Transport: DWDM + CWDM terminals, OADMs, amplifiers

Long haul hardware interconnects COs between metro areas, supporting distances greater than 200km
◆ SONET/SDH ADMs and terminals; switches with or without DCS functions; may have transport capabilities
◆ WDM: Transport + ROADM
• Transport: terminals, OADMs, amplifiers
• ROADM: OEO or photonic switching; may have transport capabilities; includes amplifiers; must incorporate ROADM technology

Packet-optical transport systems (P-OTS) is an “overlay” category; it is a subset of already reported SONET/SDH and WDM equipment (P-OTS is not added into total optical revenue)

Legacy DCS (Digital Cross Connect) optical network hardware is not included in this service.

◆ Ethernet optical used in WDM and SONET/SDH products only (not in Ethernet switches and routers)
• 10M/100M/1G
• 10G
• 40G
• 100G
◆ SONET/SDH/POS used in SONET/SDH and WDM products only (not in Ethernet switches and routers)
• OC-3/STM1 (155M)
• OC-12/STM4 (622M)
• OC-48/STM16 (2.5G)
• OC-192/STM64 (10G)
• OC-768/STM256 (40G)
• 100G

◆ WDM used in SONET/SDH and WDM products only (not in Ethernet switches and routers)
• Below OC-48/STM1, wavelength, OTN includes OC-3 and OC-12, SAN ports (FICON, ESCON, Fiber Channel)
• OC-48/STM16, wavelength, OTN (2.5G)
• OC-192/STM64, wavelength, OTN (10G)
• OC-768/STM256, wavelength, OTN (40G)
• 100G wavelength, OTN

Metro hardware connects buildings to COs and any locations between (such as CEVs and RTs), and to connect COs, POPs, and data
centers in a metro area, supporting distances of up to 200km

ROADM: OEO or photonic switching; may have transport capabilities; includes amplifiers; must incorporate ROADM technology
SLTE (submarine line terminating equipment): dry hardware only, does not include wet hardware such as festoons and
amplifiers; does not include terrestrial equipment used to drive undersea links; must be purpose built for SLTE applications

2nd gen P-OTS: platforms with an architecture that provides Ethernet switching and circuit switching (SONET/SDH crossconnect and/or OTN) across the chassis; must support connection oriented Ethernet (COE) protocols (e.g., MPLS-TP, PBB-TE, T-MPLS, switched VLANs), WDM, and ROADM at a system level with a single control plane; does not include external ROADM systems

1st gen P-OTS: platforms that provide L2 Ethernet switching and/or aggregation, SONET/SDH ADM (may have crossconnect), and WDM
interfaces; may have some but not necessarily all of the following: the ability to groom and switch both SONET/SDH and Ethernet across the chassis, connection-oriented Ethernet protocols (e.g., MPLS-TP, PBB-TE, T-MPLS, switched VLANs), and OTN G.709 client interfaces


. Optical transceiver market rockets to $1.2B in 2010, forecast to hit $2.8B by 2015

. ROADM WSS component market on pace for 20% annual growth through 2015

. OTN survey reveals huge shift in carrier plans for optical switching

. EMEA optical network hardware market expected to turn around in 2011

. High speed network port market to hit $52 billion in 2015 (1G, 10G, 40G, 100G)

Disclaimer:  This author has no business relationship with Infonetics, but we respect the primary market research that is the basis for their reports