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Metro Bandwidth Growth Outpaces Long Haul; North America Remains Weak

BOSTON (June 19, 2018): Japan’s optical hardware spending surge continued for the fourth quarter in a row with an extraordinary 82% year-over-year increase in the first quarter of 2019 according to the most recent Optical Hardware Report from market research firm Cignal AI. Prime beneficiaries were domestic suppliers NEC, Mitsubishi and Fujitsu along with Ciena and Nokia, all of which posted significant gains during the quarter.

“The exceptional optical market growth in Japan is the story to watch for 2019,” said Scott Wilkinson, Lead Analyst for Optical Hardware at Cignal AI. “Network operators have begun significant network rebuilds and expansions, and domestic as well as non-Japanese vendors continue to grow sales in the region at remarkable rates.”

North American optical sales did not experience an anticipated turnaround in 1Q19. Continued growth in sales to cloud and colo operators was offset by slowdowns among traditional telco operators who are focusing capex in other areas such as 5G wireless rollouts.

Cignal AI’s Optical Hardware Report is issued each quarter and examines optical equipment revenue across all regions and equipment types. The analysis is based on financial results, independent research, and guidance from individual equipment companies. Forecasts are based on overall spending trends for equipment types within the regions.

Additional key findings in the 1Q19 Optical Hardware Report:

  • Metro Bandwidth Outpaces Long Haul – While long haul spending grew at a higher rate than metro, analysis reveals that metro bandwidth is growing more rapidly.
  • Growth in China Decelerates – Growth in China moderated into the single-digits during 1Q19, as 2018’s high spending by Chinese carriers could not continue indefinitely.
  • EMEA Posted Solid GainsBoth metro and long haul spending grew during the quarter, with growth led by both traditional and cloud & colo operators.
  • CALA Continues Lackluster Performance –Q1 showed no improvement for the region. Relief may be coming, as vendors believe major carriers in the region will return to spending later this year.

Optical Hardware Superdashboard

Cignal AI’s interactive Optical Hardware Superdashboard is available to clients of the Optical Hardware Report and provides up-to-date market data for real-time visibility on individual vendors’ results. Users can manipulate data online and see information in a variety of useful ways.

About the Optical Hardware Report

The Cignal AI Optical Hardware Report is published quarterly and includes market share and forecasts for optical transport hardware used in optical networks worldwide. In addition to the interactive tracker, the analysis includes an Excel database as well as PDF and PowerPoint summaries. Subscribers to the Optical Hardware Report also have access to Active Insight, Cignal AI’s real-time news service on current market events.

The report examines revenue for metro WDM, long-haul WDM and submarine (SLTE) equipment in six global regions and includes detailed port shipments by speed. Vendors in the report include Adtran, ADVA, Ciena, Cisco, ECI, Ekinops, Fiberhome, Fujitsu, Huawei, Infinera, Mitsubishi Electric, NEC, Nokia, Padtec, Tejas, Xtera, and ZTE.

Full report details, as well as articles and presentations, are available on the Cignal AI website.

About Cignal AI

Cignal AI provides active and insightful market research for the networking component and equipment market and the market’s end customers. Our work blends expertise from a variety of disciplines to create a uniquely informed perspective on the evolution of networking communications.

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