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This preliminary report briefly summarizes our Transport equipment market share analysis for 1Q24. It is released once company results for the current quarter are complete. Clients interested in real-time updates as companies report should monitor release notes and download the updated Excel file.
The final report, including detailed analysis and updated forecasts, will be available to all clients by June 7th, 2024. Clients can also register for the live presentation on June 12th, 2024 – if you register and don’t attend, you’ll still be notified when the download is available.
Summary and Highlights
Worldwide
- The worldwide optical market fell -9% in the first quarter. Sales excluding China, which grew 14% YoY, declined -18%.
- The worldwide routing market fell -20%, heading towards a reversion to normal following the first half of 2023 in which it jumped 16% as accumulated backlogs cleared.
- Macroeconomic concerns and the high cost of capital are prolonging the process of inventory absorption among traditional service providers.
- Long Haul and Metro spending continue to diverge, with Long Haul declining less than Metro for the quarter (-8% vs -11%). SLTE (a form of Long Haul) remains strong, growing 5%.
Regional
- North American 1Q optical revenue dropped -18%; its fourth quarter of decline following 18 months of growth. The comparison comes against an elevated 1Q23, the last quarter before demand turned down, during which vendors delivered large quantities of hardware against order backlogs. Routing sales declined -35% to their lowest level since 2020 as cloud spending cooled alongside SP.
- Optical transport sales in China jumped 14% to a first quarter record $1.1B as the country’s Tier 1 carriers have begun the next phase of long-haul buildouts. Routing sales were flat.
- RoAPAC optical sales fell -28% following a significant run-up from 3Q22 to 3Q23. Sales of $333M are similar to 1Q22 levels, before the recent run-up driven by India’s Tier 1 carriers’ buildouts in support of 5G.
- EMEA optical and routing sales fell -1% and -3% respectively. After a slight rise in 2021, optical spending in the region is where it was in 2019 at roughly $800M per quarter, while routing sales have remained flat at just under $1B.
- Japanese revenue has yet to find bottom, dropping -44% in 1Q24. It was the tenth straight quarter of YoY declines following 15 consecutive quarters of growth. Sales of $94M were the lowest first quarter on record.
- Optical spending in CALA fell -15% following a 2023 in which the region grew every quarter and finished with 5% annual growth.
Customer Markets
- Cloud & Colo operators grew 1Q24 optical spending 25% worldwide, led by 34% growth in North America and 47% growth in EMEA. Service Provider optical purchases declined -45% in North America due to the maturation of 5G buildouts, ongoing inventory absorption, and delays in federal broadband funding. In North America, sales to Cloud & Colo operators exceeded Service Provider spending for the second consecutive quarter.
- In routing, Cloud & Colo continued to gain share, declining -14%, compared to -20% for SP and -26% for Enterprise & Government.
Release Notes
- All data through 1Q24 is complete with the exceptions of Infinera, and Padtec, which are preliminary.
- Unless otherwise indicated, all percentages in this report show year-over-year growth.
Ciena’s January-end quarter is reported as calendar 1Q24. Cisco’s sales data aligns with calendar 1Q24.
Vendor Summary Reports
Cignal AI’s Vendor Summary Reports focus on the most recent quarterly financial results and items of interest for select vendors. For this quarter, the following vendor reports are available:
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