“While optical hardware revenue trends in all world regions were not positive in the first quarter of 2012, the most alarming development is that year-over-year in EMEA – particularly Europe – spending on WDM optical equipment decreased faster than spending on legacy SDH equipment,” notes Andrew Schmitt, principal analyst for optical at Infonetics Research. “This is not the behavior of a region experiencing only a minor quarterly pullback. By contrast, the trend in North America was the opposite, with carriers cutting spending year-over-year but allocating towards forward-looking technology investments like WDM equipment and ROADMs.”
Some highlights from the report:
- While the global WDM and SONET/SDH optical network equipment market declined 23% in 1Q12 to $2.8 billion (the largest quarterly drop in years), the impact was sharpened by a strong previous quarter, when the market grew 9%
- Revenue for all optical vendors declined in EMEA, with the exception of Infinera.
- Though EMEA typically has a seasonal sequential decline in the first quarter, 1Q12 was the worst quarter for optical capex in over 5 years.
- Fujitsu and Ciena outperformed competitors in North America.
- Asia Pacific was buoyed by strong spending in Japan, with NEC and Fujitsu posting eye-popping 28% gains in 1Q12 from the year-ago first quarter.
- Aside from the standout performances by NEC and Fujitsu, while many of the big vendors enjoyed gains the previous quarter, 1Q12 was characterized by smaller companies such as Infinera, ADVA, and Transmode outperforming the market.
- ROADM optical equipment spending was flat in 1Q12, an achievement considering this category posted a record quarter in 4Q11.