Optical subsets up while market slumps

Leading research firms recently released figures and made statements indicating that certain subsets of the worldwide optical-hardware market are experiencing healthy growth while the overall market languishes.

In the long-haul, revenue will decrease by 50% this year from last and remain relatively flat until about 2007, according to Probe Research. A slight improvement might occur in 2004 but not enough to reach 2001 revenue levels, when long-haul accounted for 51% of the total optical market, Probe says.

Infonetics Research, meanwhile, says that after declines in 2003 and 2004, worldwide revenue for the optical-hardware market overall will be slightly up in 2005.

For the third quarter, the worldwide optical-hardware market was down 14% from last quarter, according to Infonetics and its competitor, Dell'Oro Group. Both companies tally long-haul and metropolitan wavelength division multiplexing (WDM), SONET/synchronous digital hierarchy (SDH) and optical switching systems, while Infonetics adds passive optical networking (PON) devices to its optical hardware mix. Infonetics says the worldwide revenue totaled $2.26 billion. Dell'Oro's count, which doesn't include PON devices, had it at $1.64 billion.

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Leading research firms recently released figures and made statements indicating that certain subsets of the worldwide optical-hardware market are experiencing healthy growth while the overall market languishes.

In the long-haul, revenue will decrease by 50% this year from last and remain relatively flat until about 2007, according to Probe Research. A slight improvement might occur in 2004 but not enough to reach 2001 revenue levels, when long-haul accounted for 51% of the total optical market, Probe says.

Infonetics Research, meanwhile, says that after declines in 2003 and 2004, worldwide revenue for the optical-hardware market overall will be slightly up in 2005.

For the third quarter, the worldwide optical-hardware market was down 14% from last quarter, according to Infonetics and its competitor, Dell'Oro Group. Both companies tally long-haul and metropolitan wavelength division multiplexing (WDM), SONET/synchronous digital hierarchy (SDH) and optical switching systems, while Infonetics adds passive optical networking (PON) devices to its optical hardware mix. Infonetics says the worldwide revenue totaled $2.26 billion. Dell'Oro's count, which doesn't include PON devices, had it at $1.64 billion.

The optical-hardware market is and will continue to be propped up by the metropolitan optical systems, Infonetics says, which comprised 64% of optical hardware sales in the third quarter. Within that market, intelligent metropolitan systems - which at $1.6 billion in the third quarter accounted for 69% of metropolitan optical revenue and 72% of all optical-hardware revenue - will experience the most growth, the firm says.

Infonetics defines intelligent optical gear as data-aware equipment with remote configuration and remote-service provisioning that can be deployed in mesh, star and ring topologies for rapid buildout and revamp. This contrasts with legacy SONET/SDH equipment that only can be deployed in a ring configuration, is optimized for voice and TDM traffic, requires multiple systems for cross-connection and add/drop multiplexing functions, and requires lengthy and cumbersome circuit provisioning.

While the total metropolitan market is down 8% in the third quarter, intelligent metro is down only 5%, Infonetics says. SONET/SDH still outpaces WDM sales by a more than 2-to-1 ratio, representing 70% of total spending in the third quarter, while WDM is 29% and PON 1%, the firm says.

SONET/SDH equipment accounted for 67% of the total market in the third quarter, according to Dell'Oro. There also was some changing of the SONET guard in the third quarter: Lucent and Siemens vaulted to the top of the list in SONET/SDH from middle of the pack.

Lucent jumped to No. 1 from No. 3, and Siemens leaped to No. 2 from No. 5. Lucent replaces Alcatel in the top spot while Siemens supplants Nortel at No. 2.

Siemens was the only vendor with sequential growth in SONET/SDH. The vendor's revenue increased 19% from the second quarter, while Lucent's declined by 13%, Dell'Oro says. Nortel's SONET/SDH revenue declined 22%.