Investor Call – China 2017, CFP2-ACO, Coherent DSPs

Andrew Schmitt gave an update on the optical equipment and component market during an investor call hosted by Troy Jensen of Piper Jaffray on Tuesday, October 4. Sixty-eight investors participated. An extended Q&A session followed Andrew’s presentation, and topics of interest included:

  • China 100G port volume trends for 2H16 and 2017
  • Huawei’s upcoming 100G technology decisions and supplier purchasing shifts
  • CFP2-ACO shipments and the component & equipment supply chain for this product
  • Coherent DSP R&D developments and supplier updates
  • Updates on direct-detect 100G and PAM-4 development
  • Observations on Infinera, Ciena, Acacia, Inphi, and Clariphy and discussion of potential M&A activity

Following is a summary of the key takeaways, as well as a full transcript of the discussion. Cignal AI clients can also listen to an audio replay.

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ECOC 2016 Market Focus Presentation

Andrew Schmitt has returned from a week of meetings in Europe including three days at the European Conference on Optical Communications (ECOC). He spoke to a capacity crowd at the ECOC Market Focus event and presented a summary of Cignal AI’s latest data. The presentation explored the latest developments in the optical DCI equipment and Metro 100G+ markets.

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Optical Equipment Spending in China Up 25% Year over Year

Boston, Massachusetts (23 August 2016)- Today, research firm Cignal AI released market share analysis from its 2nd quarter 2016 (2Q16) Optical Hardware report. The report summarizes optical equipment revenue results for the quarter and capstones earlier interim reports made by Cignal AI as company results were systematically released throughout the quarter.

According to the report, global spending on optical network equipment (SONET/SDH, WDM, and Submarine LTE) grew 15% from the previous quarter.  However, this growth was largely driven by Huawei’s strong results in China and its export markets. Without Huawei’s results, the market for equipment was essentially flat YoY.

“The surge in deployment of coherent 100G technology made China the largest global market for optical equipment for the first time. We see no signs yet of a slowdown,” said Andrew Schmitt, Lead Analyst at Cignal AI. “Chinese service providers are preparing to pivot 2017 spending into metro WDM and to adopt both DCO technology from Acacia and CFP2-ACO technology from companies such as Oclaro.”

“Worldwide, long haul WDM grew faster than metro WDM, as a multi-year cycle of spending is nearing completion. Lower cost, higher capacity coherent technology has reached production and will now catalyze a spending shift into metro WDM.”

Optical Hardware Report Highlights

  • In North America, Ciena, Coriant, and Fujitsu recorded a weaker quarter as robust spending from Cloud and Colo and Cable MSO customers was not enough to offset declines in spending by the tier-1 operators such as AT&T and Verizon.
  • Huawei results carried EMEA to year over year (YoY) growth; however, it masked a steep decline in revenue for other equipment vendors in the region.
  • In China, optical equipment spending was up dramatically – 25% YoY – as widespread deployment of coherent 100G continued.
  • ADVA posted exceptional growth with a large increase in coherent 100G shipments to North American Cloud and Colo customers. Also, Nokia secured a major win with China Mobile with its 1830 PSS-24x platform.

About the Optical Hardware Report

The Cignal AI Optical Hardware report includes market share and forecasts for optical transport hardware used in fiber optic networks worldwide. Deliverables include traditional Excel database and Powerpoint summaries, plus continuously published Active Insight.

The report analyzes spending on metro WDM, long haul WDM, and submarine (SLTE) in six global regions. The vendors that are examined include Adtran, ADVA Optical Networking, Ciena, Cisco, Coriant, ECI Telecom, Ekinops, Fiberhome, Fujitsu, Huawei, Infinera, Juniper (BTI Systems), NEC, Nokia, Padtec, TE Connectivity, Xtera, and ZTE.

Full report details are available to registered users.

About Cignal AI

Cignal AI provides active and insightful market research for the networking component and equipment market as well as its end customers. Our work blends expertise from a variety of disciplines to offer a unique, informed perspective on the continuous evolution of networking communications.

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Next Gen Optical Networking 2016

Andrew presented the keynote presentation to kick off Next Gen Optical Networking in Nice, France on June 29th. His presentation was titled “Making Technology Decisions in a Challenging Environment”, and used Cignal AI’s recently released optical equipment market data to support observations of the market.

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Investor Call – China, CFP2-ACO, ROADMs & More

Andrew Schmitt created some excitement when he spoke about optical component and equipment market trends on a Piper Jaffray investor call on April 22. 83 investor clients were on the line, and some insightful questions were posed to Andrew as he gave his observations on a wide range of topics. The following is a full transcript of that discussion.
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