Optical Network Hardware Market Skyrockets

Infonetics report says worldwide optical network hardware revenues were up 21% in the last quarter of 2004 alone, to reach $2.6 billion.

March 2, 2005

2 Min Read
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The optical network hardware market grew at a spectacular rate last year, according to a new report from Infonetics Research. In its quarterly Optical Network Hardware report, Infonetics found that worldwide optical network hardware revenues were up 21% in the last quarter of 2004 alone, to reach $2.6 billion.

For the year as a whole, revenues were up 10% over 2003 to reach $9 billion, and Infonetics expects steady growth to continue through 2008. Metro equipment made up 74% of optical network hardware revenues in the last quarter, the vast majority of which was synchronous optical network/synchronous digital hierarchy (SONET/SDH) equipment. SONET/SDH equipment made up 69% of all sales and 85% of metro hardware.

Noting that Metro wavelength division multiplexing revenues exceeded $380 million in the last quarter of 2004, Infonetics principal analyst Michael Howard said that the market was on fire. "Nearly every metro WDM manufacturer had a good-to-great quarter," Howard said in a statement. "Service providers are depending more and more on DWDM and CWDM for a range of access applications, and are starting to build more metro rings, increasing their dependence on WDM as the eventual basic metro transport layer. ROADM technology will further facilitate this trend."

Virtually all of the leading vendors had an impressive last quarter, with Alcatel maintaining its market share lead over Nortel, Huawei and Fujitsu. Europe, the Middle East and Africa accounted for 35% of optical network hardware revenue, with North America and Asia Pacific trailing with 29%.

Infonetics expects an improved business environment and industry pressures to reduce operating expenses to drive slow growth in WDM and intelligent SONET/SDH sales this year despite a cooling-off in the long-haul market. According to the report, long haul SONET/SDH sales were down 16% and long haul WDM dropped 10% over 2003 last year.

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