The Optical Transport equipment market declined 18 percent year-over-year in 3Q 2024 due to reduced global demand, according to a new report from Dell’Oro Group. Revenue contribution was down year-over-year in all of the major geographic regions.
“The demand for Optical Transport equipment is significantly lower,” said Jimmy Yu, Vice President at Dell’Oro Group. “Although customer inventory is still a factor causing the declining optical sales, we believe unfavorable macroeconomic conditions had a larger influence on the current market results. This is best exhibited by the market contraction in some important geographic regions where customer inventory levels were not elevated, such as Europe and China,” added Yu.
Additional highlights from the 3Q 2024 Optical Transport Quarterly Report:
- Most regions declined more than 20 percent in the quarter, with the highest declines occurring in India and China. India posted a revenue decline of 40 percent, and China posted a revenue decline of 30 percent.
- The customer inventory correction that started in 4Q 2023 is nearly behind us. Vendor comments indicate that order flow is increasing, and optical revenue in the North American region, where most of the excess inventory build-up occurred, is improving.
- The top three vendors for the year’s first nine months were Huawei, Ciena, and ZTE. Huawei gained the most market share among all the vendors during that period, with an estimated gain of four percentage points of market share. The vendor with the next highest share gain was ZTE.
- We forecast the Optical Transport market to return to growth in 2025 once the customer inventory correction phase ends in late 2024 and global economic conditions begin to improve in early 2025.