Optical hardware sales shrink y-o-y for third straight quarter, says Ovum

2012-11-22 17:21:26

Revenues for the optical networking systems segment retreated year-on-year for the third consecutive quarter in 3Q12, asserts market research firm Ovum. And optical transmission vendors shouldn’t count on the usual fourth quarter spending spree to make things right, add Ovum analysts.

Weak macro-economic factors, particularly in Europe, have carriers leery about spending money to keep up with the continuing rise in bandwidth demands. These operators are “running networks hotter” in an effort to save money, Ovum analysts say.“

Preliminary analysis of 3Q12 results offers little positive news,” explains Ron Kline, principal analyst, network infrastructure at Ovum. “The competitive environment is challenging at the moment. Many vendors are grateful just to see their business stay flat. It will be very difficult for the market to reach the 2% growth we have predicted for the year. Now is the time to position next-generation products with operators which will have no choice but to turn spending back on in 2013.”

Ovum expects sales to pick up at least a bit in the final quarter of this year – but vendors who have suffered so far this year shouldn’t expect to get healthy all at once.

“With three uninspiring quarters of 2012 behind us, we are advising our clients that the global market will likely contract into the $14.5–15.0 billion range, a further retrenchment from our 2Q alert guidance. A modest ‘budget flush’ factor is included in our revised estimate, but we are not anticipating a large-scale buying spree that would recoup all the ground lost in the three earlier soft quarters,” concludes Kline.

Additionally, the market research firm expects the global economy to continue to be weak into 2013.

Sales in 3Q12 dropped 8% year-on-year in EMEA, Ovum reports. North American spending slipped 11%. South and Central America spending also declined 4% over the same quarter in 2011. The combined shortfall was enough to offset a 14% year-on-year increase in Asia-Pacific spending, leading the overall optical network systems sector to decline 1% compared with 3Q11 to $3.7 billion.

Four vendors -- Ericsson, Fiberhome, Huawei, and NEC – escaped the 3Q12 carnage and reported both sequential and year-over-year revenue growth. However, Nokia Siemens Networks, Tellabs, and ZTE suffered sequential and year-over-year revenue declines. Meanwhile, Alcatel-Lucent’s saw its quarterly revenues slip below $400 million for the first time and its rolling revenues fall below $2 billion, which Ovum asserts is an all-time low.
The above information is edited by 10GTEK.
10GTEK TRANSCEIVERS CO., LTD (Hereinafter refered to as 10GTEK) is specialized in developing and manufacturing Fiber Optical Transceivers and High Performance Cables which are wildly applied in Datacom, Telecom and CATV, providing customers with top quality and cost effective products. Our High Speed Cables cover Passive SFP+ Cable, Active SFP+ Cable, QSFP+ cables, MiniSAS (SFF-8088) Cables, CX4 Cables, Harness cables, Breakout Cables, Patchcords. We also manufacture Fiber Optic Transceivers like 10G XFP, 10G SFP+, SFP DWDM/ CWDM, GBIC, etc. The prompt response and excellent customer support contribute to clients‘ full satisfaction.Today, 10GTEK has been growing fast in the optical field for its unique and competitve excellence which has got a high attention from datacom and telecom.
This article reader also like: University of Regina and Cisco establish Research Chair to further e-Governance in Canada