Optical Shines in Q2
According to the report, sales for the quarter reached $3.5 billion, which is 14 percent higher than the first quarter of 2007 and 20 percent higher than the second quarter of 2006.
Optical vendors saw strength across all segments of the market, with annualized metro WDM spending topping $2.4 billion and annualized DWDM backbone sales exceeding $1.9 billion.
Dana Cooperson, Ovum-RHK vice president of network infrastructure, says the growth is due not only to strength in the wireline market, but in other markets as well.
"The addressable market is growing," she says, "spreading to different types of buyers and different markets," including wireless, MSOs, and research and education customers. Developing markets such as India and China could provide considerable growth as well.
Alcatel-Lucent (NYSE: ALU) was the only company to top 20 percent market share. It grew more than the market, with sales increasing 23 percent from the previous quarter and 30 percent over the same quarter last year.
The quarter saw plenty of winners, and not many losers, due to the overall levels of growth. "There was a fair amount of good business to go around," Cooperson says.
Companies with exposure to Japan were less likely to do well, however, due to slow spending in that market. Fujitsu Ltd. (Tokyo: 6702; London: FUJ; OTC: FJTSY) was the biggest loser of all the optical providers, due to slow spending in its home market; the company was the only vendor on the list to post a double-digit decline from quarter to quarter.
Spending in China was brisk, on the other hand. Exposure to seasonal strength there led Huawei Technologies Co. Ltd. to post the largest gain among optical vendors for the quarter, a jump of 56 percent quarter-over-quarter.
While there is a good amount of buzz surrounding the shift to Ethernet and IP-based technologies, Cooperson sees continued strength in aggregation and multiservice products. Despite "all this talk that Ethernet is taking over," she says "it's not going to happen tomorrow. There's a misconception that Sonet/SDH is history."
— Ryan Lawler, Reporter, Light Reading