While the optical market ended on what Andrew Schmitt, principal analyst for optical at Infonetics Research, said was a flat note in 2012, the research firm has forecast in its Optical Network Hardware report that there will be an uptick in optical spending in 2013.
While the global optical network hardware market rose 2 percent sequentially in Q4 2012, it declined 13 percent from Q4 2011. For the full year 2012, total optical equipment declined 10 percent worldwide. Perhaps not surprisingly, the SONET/SDH optical segment dropped 30 percent.
On the vendor side, Alcatel-Lucent (NYSE: ALU), Ciena (Nasdaq: CIEN) and Infinera (Nasdaq: INFN) all saw improvement in WDM sales throughout 2012.
Following what was its lowest optical revenue in Q3, Alcatel-Lucent rose 29 percent in Q4 due to a rise in EMEA capex but was down overall from 2011. Although Ciena's optical revenue was down both sequentially and year-over-year, the vendor saw an uptick in shipments of its 40G and 100G equipment and is in the process of rolling out a single-carrier 100G solution. Finally, Infinera's revenue rose to $128.1 million as it saw continued customer adoption from Tier 1 telcos like CenturyLink (NYSE: CTL) for its DTN-X optical platform.
Looking towards 2013, Schmitt says there are signs that the industry will see growth in three regions: North America, EMEA and China.
In North America, the main driver of growth will be an anticipated surge in 100G optical network spending.
"The general consensus remains that an optical cycle for equipment in the core is emerging, what we call the 'optical reboot,'" Schmitt said.
Schmitt added there are also signs of life in both EMEA and China. In EMEA, carriers ended the year "with a spending flourish and carriers are cutting dividends to plow capital into general capex."
Likewise, in China, there are indications that service providers will be building out 100G networks in addition to being one of the largest markets for global 40G WDM.
- see the release
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