2Q17 Optical Hardware Results

Cignal AI has released its 2nd quarter 2017 (2Q17) optical hardware market share analysis, which includes a summary of revenue results for the quarter.

Summary

Global spending on optical network equipment increased slightly, led by increased spending in China and India.

• Optical revenue in China is up 13 percent for the first half of 2017 as compared to the same period in 2016. The weak demand reported by component makers is a result of an ongoing inventory correction (primarily at Huawei), rather than a signal of weak end market demand.
• Huawei and ZTE both reported record shipments of 100G coherent ports in China during the quarter. The companies also showed strong revenue performance in the region.
• North American spending increased quarter-over-quarter. Consistent with earlier Cignal AI forecasts, North America is experiencing a shift in spending from long haul to metro WDM. Ciena and Cisco are the primary beneficiaries of the double-digit year-over-year growth in NA metro WDM. Both companies grew market share, and Ciena’s North American optical equipment revenue increased by 21 percent year-over-year.
• Outside of China and Japan, the rest of the Asia Pacific (ROAPAC) countries experienced 20 percent year-over-year growth. This region’s growth was particularly fueled by India’s Reliance Jio, which is purchasing substantial amounts of equipment from Ciena and Nokia as part of an aggressive 4G LTE expansion in the country.
• EMEA revenue dropped substantially, stemming from sharp declines in spending in the long haul WDM and submarine systems markets. Metro WDM spending remained flat year-over-year.
• Growth in metro WDM spending is creating greater demand for higher speed coherent ports, which are evolving from 200G to speeds as high as 400G later this year.

Subscribers to the Optical Hardware report can download an excel file with actual results through 2Q17. This Excel file contains only historical data, and is an interim release. A file with greater detail, including updated forecasts and additional analysis, will be available August 25th, 2017.

Analysis of the market and its participants during 2Q17 follows.

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