ANALYST NOTE

“The 4-quarter rolling average for global optical WDM equipment revenue notched a third consecutive quarter of growth in 1Q13, and we believe the market will continue trending in a positive direction this year,” notes Andrew Schmitt, principal analyst for optical at Infonetics Research.

Schmitt adds: “On a year-over-year basis (1Q12 vs. 1Q13), total optical spending is down 5%, but this is only a result of massive cuts in legacy (SONET/SDH) spending over the past 12 months (down 30%). The WDM segment is up 10% year-over year, a welcome sign that spending in this more relevant segment is returning to long-term trend levels. I won’t call it a recovery until WDM revenue is up by double-digit percents for several quarters on a year-over-year basis, but 2013 is looking good, especially in North America and China, where 100G rollouts are picking up speed.”

OPTICAL MARKET HIGHLIGHTS

• Worldwide, the overall optical network hardware market, including SONET/SDH and WDM equipment, totaled $2.6 billion in 1Q13
• North America was the only region to post growth in overall optical hardware revenue on a quarterly basis in 1Q13, up 7.5% from 4Q12
• Topping the optical market share leaderboard in 1Q13 are, in alphabetical order, Alcatel-Lucent, Ciena, Fujitsu, Huawei and ZTE
• Ciena is now a larger supplier of WDM gear than Alcatel-Lucent and is 2nd only to Huawei
• Cyan, now publicly traded, grew revenue 86% year-over-year (and is now tracked in Infonetics’ Optical Network Hardware report)
• Nokia-Siemens completed its divestiture of its optical division, now called Coriant (also tracked in Infonetics’ optical report)

Infonetics Research Inc.