Optical systems sales struggle in Q2 2018

Sales of optical network hardware experienced tough sledding in the second quarter of 2018, reports Heidi Adams, senior research director, transport networks, IHS Markit. Quarterly revenues of $3.5 billion represented a year-over-year decline of 7%, according to the 2Q18 “Optical Network Hardware Market Tracker” report Adams recently authored.

The assessment echoed those of other analysts (see “EMEA 2Q18 optical systems spending up, North America down: Cignal AI” and “ZTE ban depresses 2Q18 optical network systems sales: Dell’Oro”). Adams agreed that a significant spending decline in China – a 17% drop from that of the year-ago quarter, she estimates – was a significant factor. The fact that ZTE was on the sidelines didn’t help matters here. Meanwhile, Tier 1 operators in North America reduced their spending on long-haul equipment, she said. Submarine line terminal equipment (SLTE) sales proved soft as well, off 50% from 2Q17.

Even WDM sales, a usual stalwart category, declined 6% year over year, although the segment did improve sequentially by 9%.

However, the quarter wasn’t universally negative. Demand for optical network hardware remains strong in India, while Japan saw spending pick up as well. Overall, Adams and IHS Markit remain optimistic in the longer term about optical systems sales, calling for a 4% compound annual growth rate (CAGR) from 2017 through 2022.

From a vendor perspective, Huawei remained on top, achieving a new high of 36% market share. Ciena moved into the second position, surpassing third place Nokia.

The IHS Markit “Optical Network Hardware Market Tracker” covers the global market for metro and long-haul WDM and SONET/SDH gear and SONET/SDH and WDM ports. It offers market size, market share, forecasts through 2022, analysis, and trends information.

Source: https://www.lightwaveonline.com/