Cignal AI has released its 1st quarter 2017 (1Q17) optical hardware market share analysis, which includes a summary of revenue results for the quarter.
Global spending on optical network equipment eased worldwide, led by a double digit decline in North America.
Ciena remains the best performing company in North America (NA) as it remained immune to sharp pullbacks in long haul WDM (LH WDM) spending. NA spending continues to stall as a result of a technology transition from long haul to metro WDM capex, as well as materially lower results from Infinera – the second largest vendor in the region.
European (EMEA) spending was weaker although some vendors reported good results compared with 1Q16.
Optical equipment spending growth in China stalled as uncertainty about the outlook for 2017 rippled through the industry. Huawei remains very confident growth will return in 2H17 but its component suppliers grow increasingly negative as they receive mixed messages from the supply chain.
Metro WDM growth has yet to appear in order to offset sharp declines in LH WDM spending. This will change in 2017 as multiple vendors bring the technology to market. Coriant, Infinera, and Nokia have been impacted by this trend.
Subscribers to the Optical Hardware report can download an excel file with actual results through 1Q17. This Excel file contains only historical data, and it is an interim release. A subsequent file with updated forecasts and additional analysis will be available June 19, 2017.
There was a new cult this year at OFC, the ‘Cult of Open.’ It formed from rising sentiment that the lack of interoperability of vendors in optical networks is a major problem and that the industry needs to embrace hardware dis-aggregation.
This is not a bad cult – it ignited a healthy debate that illuminates both the positive and negative aspects of open networks and closed single-vendor networks. But some members of the Cult of Open overlook an inconvenient truth – closed networks from one vertically integrated vendor can vastly outperform open networks in some cases. Cignal AI’s key takeaways concerning open optical networks and hardware dis-aggregation include:
On February 27th, Cignal AI issued full optical equipment market share analysis for 4th quarter 2016 (4Q16). This second report, issued on March 9th, extends our analysis and summarizes forecasts and outlooks for the industry through 2021.
Subscribers to the Optical Hardware Report are able to download an excel file with actual results through 4Q16 along with detailed, up-to-date forecasts. A compilation of our latest analysis is also available in both web format as well as .pdf.
Cignal AI has released its 4th quarter 2016 (4Q16) optical hardware market share analysis, which includes a summary of revenue results for the quarter as well as the entire calendar year 2016 (CY16).
Global spending on optical network equipment increased in all global regions except North America during CY16.
Nokia and ADVA were the only vendors recording significant gains in North America in a challenging 2016 environment as growth in Cloud and Colo spending failed to offset decreases in Incumbent capex. Overall, NA spending stalled in the face of the beginning of the transition from long haul to metro WDM capex.
Huawei drove EMEA’s modest annual spending growth in 2016, as its strong performance in this region masked the decline in revenue experienced by other equipment vendors.
Optical equipment spending in China – led by Huawei – increased dramatically. Deployment of coherent 100G ports doubled from that of the previous year. 2017 heralds even more rapid change, as Huawei and ZTE use new component technologies and the deployment of 100G moves to the regional level.
Outside of China, Ciena and Nokia outperformed their peers by leveraging leading edge 200G technology and tightly integrated supply chains. ADVA benefited from a wave of Cloud and Colo spending but now must face the uncertain revenue cycles that are characteristic of these customers. Infinera is scrambling to complete a critical product cycle while Fujitsu and Coriant navigate product and market transitions.
Subscribers to the Optical Hardware report can download an excel file with actual results through 4Q16. This Excel file contains only historical data, and it is an interim release. A subsequent file with updated forecasts and additional analysis will be available March 3, 2017.
Cignal AI has released its comprehensive 3rd quarter 2016 (3Q16) optical equipment market share analysis, which provides a summary of revenue results for the quarter.
The global spending on optical network equipment increased dramatically in 3Q16, with all global regions showing increased spending year over year (vs 3Q15).
In North America, Ciena, Nokia, ADVA and Coriant all recorded positive year over year (YoY) results with Cloud and Colo customers driving large revenue gains. Overall, the NA region grew more modestly YoY than some of the other regions. Cable MSO’s spending declined, and large gains from the above vendors offset revenue declines at both Fujitsu and Infinera.
Huawei was the driver of YoY growth for EMEA yet again, as the company’s strong performance continued to mask declines in revenue for other equipment vendors in the region. Excluding Huawei, there was a sharp decline in spending, and Infinera was the only other vendor with substantial YoY gains.
Chinese optical equipment spending continued to surge, 20+% YoY, as coherent 100G deployment marched forward. Chinese equipment companies anticipate further growth through 2017, with an acceleration in metro WDM deployment next year.
Outside of the secular boom benefiting Chinese suppliers, Ciena and Nokia performed well YoY and ADVA preserved large gains it made in 2Q16. A common denominator of growth was exposure to the Cloud and Colo sector.
Japanese equipment suppliers enjoyed a second quarter of YoY revenue increases as 100G deployment is ramping up in the region. At the same time, a market share shift from NEC to Fujitsu appears to be taking place.
Subscribers to the Optical Hardware report can download an excel file with actual results through 3Q16. This Excel file contains only historical data, and it is an interim release. A subsequent file with updated forecasts and additional analysis will be available November 28th.
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. Continue Reading
Cignal AI has released full optical equipment market share analysis from 2nd quarter 2016 (2Q16). This report summarizes optical equipment revenue results for the quarter.
Subscribers to the Optical Hardware report can download an excel file with actual results through 2Q16. This Excel file contains only historical data and is an interim release. An excel file with updated forecasts and additional analysis will be available August 29th.
Global spending on optical network equipment 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 was essentially flat YoY.
In North America, Ciena, Coriant, and Fujitsu recorded a weaker quarter than the previous as the robust spending from Cloud and Colo operators and from Cable MSO’s was not enough to offset declines in spending by the tier-1 operators such as AT&T and Verizon.
Huawei 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 the widespread deployment of coherent 100G continued to unfurl.
Second to Huawei, ADVA posted the strongest quarterly results with a large increase in coherent 100G shipments to North American Cloud and Colo customers. Also, Nokia secured a major win with China Mobile.
Detailed analysis of the market and it’s participants for 2Q16 follows. Requires Optical Hardware subscription.
Our initial set of optical equipment results and forecasts for Datacenter Interconnect, Advanced Optical Switching, as well as detailed 100G+ Coherent and non-coherent port shipments have been published in Excel format.
Report information, tracked vendors, and details on categories have also been updated. Subscribers can download the full excel file, registered users can view updated report information.
Andrew presented “Metro DCI – What’s Next?” at the annual OSA Executive Forum before OFC 2016. His slides focused on the evolution of metro DCI and highlighted the opportunity for metro-access 100G, including coherent and non-coherent approaches.
Co-panelists included Arista and Microsoft. Microsoft used this opportunity to announce it’s intention to deploy InPhi’s ColorZ PAM-4 metro-access 100G technology. Requires Optical Active Insight subscription.
Component and equipment vendors outlined the investments they are making in anticipation of some service providers adopting open line systems or fully dis-aggregated optical systems. This is a contentious technology trend in the industry; one which ignites opinions and whose conclusion is far from clear.
After silicon photonics, this was the area of the most interesting activity during OFC 2016. It is a complex trend requires equipment & component vendors to pivot both their hardware architectures and business models to address new potential opportunities. And it is far from clear whether this market will extend beyond the webco.
Fujitsu Network Communications rolled out its new 1FINITY Platform, aimed at service providers interested in dis-aggregated optical network architectures.
“Both incumbent service providers and new hyperscale cloud computing service providers are interested in the flexibility, rapid development cycles, and open environments that disaggregated networking architectures provide,” said Andrew Schmitt, founder and lead analyst, Cignal Al. “Fujitsu is taking the lead in defining this segment of the optical transport market.”