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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