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DWDM

Huawei Gains Optical Ground in North America

Huawei Technologies Co. Ltd. has cracked the North American optical transport market and could be poised to attract business in larger and larger carriers, according to a new Heavy Reading report.

Huawei has had its share of wins in developing countries but "has been a non-factor in North America to date," analyst Sterling Perrin writes in the report, "Optical Networking for Tier 2/3 Operators in North America."

That status has changed in the past two years, though. Thanks in particular to long-haul DWDM work, Huawei has crept up to become the No. 7 supplier of optical gear to the Tier 2 and 3 North American camp.

Competitors tend to dismiss Huawei's North American prospects, but Perrin believes the company's standing is no fluke.

"Once the door is opened (and it has), it is not difficult to imagine Huawei working its way into bigger networks over time," he writes.

"Over time" could be a shorter period than some think. Infinera Corp. (Nasdaq: INFN), which didn't have a product on the market five years ago, ran away with nearly 60 percent of the Tier 2/3 long-haul DWDM business in North America in the first half of this year, Perrin writes.

The report summarizes market-share figures and profiles three major operators in the North American Tier 2/3 category: AboveNet Inc. (NYSE: ABVT), Mid-Atlantic Broadband Cooperative , and SureWest Communications (Nasdaq: SURW). It also includes profiles of 10 optical vendors.

— Craig Matsumoto, West Coast Editor, Light Reading

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malibu 12/5/2012 | 3:25:53 PM
re: Huawei Gains Optical Ground in North America If I was buying equipment from Huawei, I would keep it quiet too. I have a question for LR. Should unfair trade practices, labor exploitation, environmental polution, bribes, and IP theft have any bearing on the wisdom of choosing a communications equipment vendor?
malibu 12/5/2012 | 3:25:53 PM
re: Huawei Gains Optical Ground in North America Infinera wins hands down as their PIC offers a much better price/performance curve than anything Huawei can muster.
Stefan Sip 12/5/2012 | 3:25:52 PM
re: Huawei Gains Optical Ground in North America Huawei is #7 in tier-2/3, was is the big deal?

But Huawei is a dominate global optical vendor, so they can certainly leverage the scale to make rapid gains in the US.

Instead of debating whether people should buy Huawei, that debate is over. People buy more Huawei infrastructure than Moto, Nortel, perhaps even ALU these days. Don't you all think it is just a matter of time before Huawei wins a tier-1 in the US, considering they are already providing a significant piece of the network to Bell and Telus.
paolo.franzoi 12/5/2012 | 3:25:52 PM
re: Huawei Gains Optical Ground in North America
malibu,

If the product is cheaper and does the job, then it should be used. In fact, companies have a legal obligation to maximize their short term and long term profits.

None of the issues that you put down have anything to do with the price paid for equipment and therefore have no reason to change reason to purchase decisions.

"unfair trade practices, labor exploitation, environmental polution, bribes, and IP theft"

Those are your reasons listed. What are important are product price, product quality, service and support, and roadmap.

So, what you are asking is that companies make a social choice that the individual consumer is not willing to. Imagine that you choose not to deploy lowest cost products and you have to have higher prices because of this. It is quite clear (based on Walmart alone) that there is no significant market for mass marketing of these issues. So, no there is no reason for a company not to choose products based on these issues at this time.

seven
malibu 12/5/2012 | 3:25:52 PM
re: Huawei Gains Optical Ground in North America seven,

I don't shop at Wal-Mart, but if I did I would be buying a product that would at most have a 3 year life span, most would be much shorter, like President's Choice soda. Carrier and Telco equipment has a usefull life of over 10 years and some as high as 25 years. Its not blame I'm placing, but questioning the wisdom of choosing Huawei as a vendor, and as such a long-term partner. I myself don't have to contemplate that question long before comming to a decision.

malibu
eramk 12/5/2012 | 3:25:52 PM
re: Huawei Gains Optical Ground in North America Get real, find me a vendor that is willing or able to signup for a 25yr or even 10yr support contract. Most vendors are on lifesupport and implicitly have a shelf life well under 3 years (particularly in light of att and coming telco capex announcements). Who would you partner with?
malibu 12/5/2012 | 3:25:51 PM
re: Huawei Gains Optical Ground in North America seven,

What you've just described is the United States automobile industry. And if Carriers/Telco's use the same logic, they'll end up at the same table, sitting next to bankruptcy attorneys and facing lawmakers.

malibu
malibu 12/5/2012 | 3:25:51 PM
re: Huawei Gains Optical Ground in North America eramk,

I was referring to depreciation cycles, not service contracts. Just because "evryone is doing it", doesn't mean the "everybody" has a winning strategy.

malibu
paolo.franzoi 12/5/2012 | 3:25:50 PM
re: Huawei Gains Optical Ground in North America
I am saying the US Auto sales of all are the same. The difference is that GM, Chrysler and Ford are hung with horrible union obligations (particularly health care) which go away in 2010. Note that is already negotiated.

If you look outside the US you will find that all these companies (Chrysler is the exception and may not be worth saving), compete effectively.

Here for example is Brazil...remember where they have the whole sugar fuel thing:

Fiat, the market leader, sold 40,764 cars and trucks in November, a 23.6 percent drop from the previous month. Volkswagen sales fell 23.8 percent to 37,466 units, GM sales plunged 32.5 percent to 29,702 vehicles, and Ford sales slumped 29.4 percent to 15,943 cars and trucks. (Reporting by Alberto Alerigi Jr., Writing by Todd Benson; Editing by Derek Caney and Lisa Von Ahn) (from 12/4)

Do a google on automobile sales from various regions and you will find the word "crash" in most of them for November.

So, what you have is an industry trying to reorganize itself from heavy structural issues and a big sales collapse. This has some regional variation and is not specific to US automakers.

seven
malibu 12/5/2012 | 3:25:50 PM
re: Huawei Gains Optical Ground in North America seven,

So you're saying Toyota is in the same shape as GM, Ford and Chrysler?

malibu
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