EGHAM, U.K. -- The worldwide optical transmission systems market struggled in 2001 as revenue declined 10 percent, but the market is forecast to show positive growth in 2002, according to Dataquest Inc., a unit of Gartner, Inc. (NYSE: IT and ITB). In 2001, worldwide optical transmission revenue totaled $30.3 billion, down from 2000 revenue of $33.8 billion. The industry is not projected to surpass 2000 revenue results until the end of 2003. In 2002, worldwide optical transmission revenue is forecasted to reach$32.6 billion and then grow to $36 billion in 2003. "While the market in 2003 will be similar in size to the market in 2000, its nature will have changed significantly," said Peter Kjeldsen, senior analyst with Gartner Dataquest's EMEA Telecommunications group. "Consolidation in the market will have changed the number of vendors and operators, and their relative strengths are likely to have changed as well. The drivers for this change include a continued increase in the demand for bandwidth, introduction of an optical layer to handle DWDM channels intelligently and a continued migration of the fiber optic technology towards the edge of the network - most noticeably in metro networks." Gartner's research shows that there are significant regional differences in the market dynamics. Based on revenue, North America is the dominant region followed by Western Europe and Asia/Pacific. In terms of technology, SDH/SONET dominates, with dense wavelength division multiplexing (DWDM) in second place. The North American and Western Europe markets declined 19.6 percent and 2.3 percent respectively, in 2001. The bright spot was the Asia/Pacific market, which grew 18.8 percent, driven by strong growth in the Chinese market of 27.3 percent. "The Chinese market is the obvious attraction right now," said Kjedsen. "But because it is so obvious an opportunity, many players will try to address this market, so the competition will heat up." Gartner/Dataquest