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North America, CALA hamper optical equipment market growth in 1Q18: IHS Markit

07 Jun 2018 - optical equipment,America onu


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Growth in APAC was just strong enough to bring 1Q18 optical equipment sales into the black. (Source: IHS Markit)


Revenues of $3.1 billion from optical equipment sales represented a modest 3% year-over-year bump up during the first quarter of 2018, reports Heidi Adams, senior research director, IP and optical networks at IHS Markit. Spending increases in Europe, the Middle East, and Africa (EMEA) and Asia Pacific were just robust enough to overcome comparative softness in North America and the Caribbean and Latin America (CALA) regions, writes Adams in the market research firm’s “Optical Network Hardware Market Tracker – Q1 2018.” The year-over-year growth contrasts to a 25% sequential decline from the fourth quarter of 2017.

China was responsible for the overall good news. Absent that country’s contribution, spending throughout the rest of the world was down 2% versus 1Q17. Not surprisingly, Huawei topped the market share leaderboard, with 26% of the category’s sales during the quarter. Nokia managed a second-place finish thanks to continuing strength in EMEA and greater sales in Asia Pacific. Ciena remained tops in North America, which enabled it to garner third position globally. ZTE, despite its current problems that reached peak after the quarter ended, hung on for the number four spot.

Almost all the money spent on optical equipment in the first quarter of 2018 went to WDM gear, says IHS Markit. Spending on such systems totaled $2.9 billion, an increase of 3% versus the first three months of 2017. SONET/SDH gear attracted $206 million in sales during this year’s initial quarter, down 25% year over year.

Longer term, Adams and IHS Markit expect optical equipment sales will grow at a compound annual growth rate (CAGR) of 4.5% from 2017 to 2022. Much of this growth will come from a variety of factors in the metro, including data center interconnect demands, higher-bandwidth video transmission with the advent of 4K and eventually virtual and augmented reality, as well as 5G mobile support.

The “Optical Network Hardware Market Tracker – Q1 2018” report covers the global market for metro and long-haul WDM and SONET/SDH equipment and SONET/SDH and WDM ports. It includes market size, market share, forecasts through 2022, analysis, and trend information.

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