SAN JOSE, Calif. -- Worldwide optical network hardware revenue grew 21% between 3Q04 and 4Q04 to $2.6 billion, as Alcatel, Cisco, Lucent, Marconi, and Nortel all had strong quarters, spurred by some help from service provider capex flush, according to Infonetics Research's quarterly worldwide market share and forecast report, Optical Network Hardware. Worldwide revenue grew 10% to $9 billion between 2003 and 2004, and is projected to grow steadily through 2008.

"Metro WDM optical equipment is on fire," said Michael Howard, principal analyst of Infonetics Research and author of the report. "Worldwide revenue topped $380 million in 4Q04, a 30% increase from 3Q04. Nearly every metro WDM manufacturer had a good-to-great quarter. Service providers are depending more and more on DWDM and CWDM for a range of access applications, and are starting to build more metro rings, increasing their dependence on WDM as the eventual basic metro transport layer. ROADM technology will further facilitate this trend."

Market Highlights
- Alcatel had a huge quarter and remains the number-one leader in worldwide revenue market share for total optical network hardware, both in 4Q04 and 2004; Nortel, Huawei, and Fujitsu follow

- In 2004, Nortel and Tellabs lead in North America, Alcatel leads in EMEA, and Huawei leads in Asia Pacific

- Metro makes up 74% of all optical network hardware revenue in 4Q04

- SONET/SDH is the mainstay optical technology worldwide, making up 69% of optical equipment sales in 4Q04, and of that, 85% is metro SONET/SDH

- The long haul market hit its nadir in 2004, down 13%, with long haul SONET/SDH down 16% and long haul WDM down 10%

- WDM and intelligent SONET/SDH are expected to grow slowly in 2005 due to better business conditions and pressures to reduce opex, causing investment in a new generation of optical products

- EMEA had 35% of 4Q04 optical network hardware revenue, while North America and Asia Pacific each had 29%, and 7% from CALA

Infonetics Research Inc.