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Infonetics Research: Packet optical transport systems up 4% in 3Q08; WDM, SONET/SDH down

Communications market research firm Infonetics Research reports worldwide sales of metro and long haul WDM and SONET/SDH optical network hardware decreased 8% to $3.8 billion between 2Q08 and 3Q08.

In the report, Optical Network Hardware, Infonetics forecasts a 23% increase in worldwide WDM optical equipment sales for the year, CY07 to CY08, and a continued gradual decrease in SONET/SDH equipment sales as service providers seek to multiply their bandwidth capacity and increase bit rates using WDM technology.

The report shows that the packet optical transport system (POTS) equipment segment increased 4% in 3Q08, and now represents 12% of the overall optical network hardware market. Infonetics expects worldwide POTS equipment manufacturer revenue to grow in the strong double-digits annually through at least 2011.

"As it looks today, the effect of the general economic downturn likely will be minimal on the optical network hardware market, because consumers and businesses continue to demand more bandwidth -- even if at a somewhat slower pace -- for video applications, mobile traffic, gaming, and other bandwidth-intense applications. As traffic pressures continue to mount, service providers continue to undertake IP transformation projects and invest in optical equipment, and increasingly so in WDM versus SONET/SDH, with the end result of a very slowly increasing optical network hardware market," said Michael Howard, principal analyst at Infonetics Research.

Other highlights from the report:

--  The overall optical network hardware market is forecast to grow to
    $16.4 billion in 2011
--  Year-over-year, from 3Q07 to 3Q08, WDM spending is up 20%
--  The WDM portion of optical network hardware spending is now 49%
--  Long-time market leader Alcatel-Lucent increased its overall optical
    network hardware revenue by 1% in 3Q08, a job well done considering 8
    out of the next 9 manufacturers were down
--  The lone exception is NEC, which increased its optical revenue a
    remarkable 26% in 3Q08 as it continues fulfilling a buildout in Japan
--  The race for metro WDM ROADM revenue gets more competitive each quarter
    as more manufacturers enter the market and more service providers
    deploy metro ROADM gear
    --  Cisco maintains its metro WDM ROADM revenue lead, but barely, and
        there is now a one-point consecutive difference between the next 4
        leaders (Fujitsu, Huawei, Tellabs, and NEC)

Infonetics' quarterly optical report tracks ADTRAN, ADVA Optical, Alcatel-Lucent, BTI, Ciena, Cisco, Corrigent, ECI, Ericsson, Fujitsu, Huawei, Infinera, NEC, Nokia Siemens Networks, Nortel, OpVista, Sycamore, Tellabs, Transmode, Turin, ZTE, Xtera, and others. The report provides worldwide and regional market share, market size, and forecasts for metro and long haul optical equipment, including SONET/SDH (transport, MSPPs and crossconnects), WDM (ROADM and DWDM/CWDM transport), and POTS. The report also provides worldwide and regional port-by-speed data and analysis for Ethernet, SONET/SDH/POS, and WDM ports.

For report highlights, log in to Infonetics' online portal from www.infonetics.com (see Optical). For sales, contact Larry Howard, vice president, at larry@infonetics.com or +1 (408) 583-3335.

Infonetics Research (www.infonetics.com) is an international market research and consulting firm serving the communications industry since 1990. A leader in defining and tracking emerging and established technologies in all world regions, Infonetics helps clients plan, strategize, and compete more effectively.