Market Share: 2Q09 optical networks, global and regional
Ovum Plc
September 26, 2009 51 Pages - SKU: OV2482173
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Countries covered: China
Stratospheric spending in China related to 3G mobile builds relieved some pressure from a market reeling from a full year of economic decline. ON revenues in 2Q09 were $3.79 billion, up 8% sequentially but down 11% versus 2Q08. Annualized spending fell to $15.6 billion, a decrease of 4% compared to the year before and the first time global annualized revenues failed to grow year over year since 1Q04. Huawei had the highest sales for the second consecutive quarter with $872 million in revenue, pulling to within a fraction of a point of catching Alcatel-Lucent for overall optical networking (ON) market leadership. The Chinese aggregation spending frenzy pushed ZTE’s revenues up 213%, the highest sequential revenue growth of the top ten vendors, while NEC’s sales suffered the biggest decline at 25%. Currency fluctuations continue to hamper Alcatel-Lucent, Nortel, Nokia Siemens, Cisco, and others while helping Huawei and ZTE. All product segments showed a sequential increase in 2Q09 except SLTE, which was down 19%. Sales grew sequentially in all regions except South and Central America (SCA), with Asia-Pacific showing the strongest advance. Global spending for the first half of the year is tracking with our most likely forecast, which calls for sales totaling $15.4 billion for 2009.
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- Executive summary
- In a nutshell
- Ovum view
- 2Q09 quarterly results
- Changes to our ON share reporting started in 1Q09
- Global spending up sequentially but down versus year-ago period
- Key messages
- There’s China and then there’s everywhere else
- Strong growth in China has benefited Huawei most
- Changes in top ten market positions: ZTE and Tellabs move up; NEC, Ericsson, and Ciena move down
- Continuing demand for ON gear
- Foreign exchange shifts complicate market analysis
- “Slow” me the money
- Market share — global
- Regional imbalances, emerging market growth, and architecture evolution to WDM cause share shifts
- Market share changes
- Analysis of quarterly results
- Market growth and outlook
- Strong Asia-Pacific market growth offsets global decline; WDM growth is lagging expectations so far in 2009
- Regional analysis — all regions
- Asia-Pacific becomes the largest ON region; China and India market growth not affected by economic malaise
- Product-level analysis
- Segment overview: Wireless backhaul growth reverses the “metro WDM for aggregation” substitution trend
- Challengers’ interest in SLTE market grows despite lumpy spending and Alcatel-Lucent’s solid control of the top spot
- Regional analysis — Asia-Pacific
- China’s 3G build-outs drive 28% growth from last year in AP; aggregation surges on wireless carrier spending
- Market share changes
- Analysis of quarterly results: Huawei’s >60% China share supports AP dominance; Alcatel-Lucent, ZTE, Nortel are strong multi-country players
- Subregional Asia-Pacific results
- Market growth and outlook
- 2009 spending well ahead of forecast; strong wireless carrier spending pushing aggregation, BWM, and China ahead of expectations
- Product-level analysis
- Aggregation given new lease on life by wireless network growth; CPO and metro ROADM grow 90-100% YoY, but 40G not yet driving backbone WDM
- Regional analysis — EMEA
- 2Q09 market drops 25% versus last year but ekes out 7% sequential growth; Huawei’s rolling share hits 20%
- Market share changes
- Analysis of quarterly results: Huawei and ZTE gaining at nearly all others’ expense but Alcatel-Lucent still has commanding lead
- Subregional EMEA results
- Market growth and outlook
- 2009 spending on track with forecast
- Product-level analysis
- Metro WDM takes a breather as bandwidth management surges sequentially and backbone WDM picks up with coming 40G build-outs
- Regional analysis — North America
- 2Q09 market shows some stability; rolling average falls below $4 billion for first time since 2Q06
- Market share changes
- Analysis of quarterly results: Fujitsu overtakes Alcatel-Lucent by a fraction of a point
- Market growth and outlook
- North American ON spending in 1H09 stymied by economic conditions; market tracking with pessimistic forecast
- 2009-14 outlook
- Product-level analysis
- 2Q09 saw some stabilization of revenues; year-over-year and annualized metrics still on the decline
- Regional analysis — SCA
- SCA market still in decline; only region to fall sequentially
- Market share changes
- SCA market is concentrated at the top; large tenders have greater affect on share changes
- Market growth and outlook
- Economic slowdown sends SCA ON forecast to pessimistic scenario
- 2009-14 outlook
- Product-level analysis
- More than 55% of all SCA spending is on aggregation but WDM has the strongest growth
- List of Tables
- Table 1: Analysis of quarterly results, global ON, 2Q09
- Table 2: 1H09 global ON spending versus current 2009 forecast
- Table 3: Analysis of quarterly ON results, Asia-Pacific, 2Q09
- Table 4: Market share by subregion, Asia-Pacific ON, 1H09
- Table 5: 1H09 Asia-Pacific ON spending versus current 2009 forecast
- Table 6: Product segment-level market assessment, Asia-Pacific, 2Q09
- Table 7: Analysis of quarterly ON results, EMEA, 2Q09
- Table 8: Market share by subregion, EMEA ON, 1H09
- Table 9: 1H09 EMEA ON spending versus current 2009 forecast
- Table 10: Product segment-level market assessment: EMEA
- Table 11: Analysis of quarterly ON results, North America, 2Q09
- Table 12: 1H09 North American ON spending versus current 2009 forecast
- Table 13: Product segment-level market assessment: North America
- Table 14: 1H09 SCA ON spending versus current 2009 forecast
- Table 15: Product segment-level market assessment: SCA
- List of Figures
- Figure 1: Global ON market revenues by quarter, 3Q07-2Q09
- Figure 2: Huawei vs. Alcatel-Lucent global 2Q09 market share comparison with and without China
- Figure 3: Foreign exchange shifts favor Asian vendors
- Figure 4: Comparison of annualized ON market share for the top five global vendors
- Figure 5: Market share (rolling 4 quarters), global ON
- Figure 6: Global market share gains and losses (rolling 4Q) for 2Q09
- Figure 7: Global ON market by region, rolling 4 quarters, 2Q09 vs. 1Q09
- Figure 8: Global ON market by segment, rolling 4 quarters, 2Q09 vs. 1Q09
- Figure 9: Rolling 4Q spending in aggregation vs. metro WDM, global
- Figure 10: Quarterly product segment growth rates, 3Q08-2Q09
- Figure 11: Market share (rolling 4 quarters), Asia-Pacific ON
- Figure 12: Comparison of annualized ON market share for the top four Asia-Pacific vendors
- Figure 13: Asia-Pacific market share gains and losses (rolling 4Q) for 2Q09
- Figure 14: Market share (rolling 4 quarters), EMEA ON
- Figure 15: Comparison of annualized ON market share for the top four EMEA vendors
- Figure 16: EMEA market share gains and losses (rolling 4Q) for 2Q09
- Figure 17: Market share (rolling 4 quarters), North American ON
- Figure 18: Comparison of annualized ON market share for the top four North American vendors
- Figure 19: North American market share gains and losses (rolling 4Q) for 2Q09
- Figure 20: Comparison of annualized ON market share for the top three South and Central American vendors
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