No bounce for optical transport systems sales in 2Q20: Cignal AI
Expectations that sales of optical transport systems sales would shake off the first quarter’s COVID-19 related sales softness in 2Q20 proved unfounded, according to Cignal AI. The market research firm states in its new Transport Hardware Report that the supply chain issues encountered during the first three months of the year lingered in the succeeding three months. Network operators also indicated an unwillingness to increase capex further, which Cignal AI says could mean that the rest of the year won’t be much better for the suppliers of optical transport systems and switches/routers.
“COVID operational issues slowed deliveries and revenue recognition in the second quarter, although optical hardware sales increased in NA and EMEA due to high demand for inventory,” stated Cignal AI Lead Analyst Scott Wilkinson. “Growth is not expected to continue in the second half as carriers have pulled forward annual capex spending and networks are now able to cope with COVID-related surges.”
Sales of optical hardware in North American showed strong improvement year-over-year for both metro and long-haul WDM. Meanwhile, the Japanese market proved encouraging for both optical systems and packet transport equipment. Sales in China returned to growth for optical and packet systems. However, the rest of Asia Pacific suffered from both COVID-19 induced slowness and soft capex in India, leading to an optical sales decline of 20% for the quarter and reductions in packet sales as well, according to the report.
Looking forward, indicators are mixed. Cignal AI expects North American sales to be flat or down during the second half of the year, but believes there will be growth in China, at least during Q3. EMEA optical spending increased in 2Q20 versus the year-ago quarter but was hampered by weak Nokia sales. Cignal AI notes that Nokia predicts that sales in the third quarter will offset declines shown in the most recent quarter.
The Cignal AI Transport Hardware Report is published quarterly and includes market share and forecasts for optical and packet transport hardware used in service provider networks worldwide. The report examines revenue for metro WDM, long-haul WDM, and submarine (SLTE) optical equipment; and access, aggregation, edge, and core packet equipment in six global regions.
For related articles, visit the Business Topic Center.
For more information on high-speed transmission systems and suppliers, visit the Lightwave Buyer’s Guide.
To stay abreast of optical communications technology, subscribe to Lightwave’s Enabling Technologies Newsletter.
Stephen Hardy | Editorial Director and Associate Publisher, Lightwave
Stephen Hardy is editorial director and associate publisher of Lightwave and Broadband Technology Report, part of the Lighting & Technology Group at Endeavor Business Media. Stephen is responsible for establishing and executing editorial strategy across the both brands’ websites, email newsletters, events, and other information products. He has covered the fiber-optics space for more than 20 years, and communications and technology for more than 35 years. During his tenure, Lightwave has received awards from Folio: and the American Society of Business Press Editors (ASBPE) for editorial excellence. Prior to joining Lightwave in 1997, Stephen worked for Telecommunications magazine and the Journal of Electronic Defense.
Stephen has moderated panels at numerous events, including the Optica Executive Forum, ECOC, and SCTE Cable-Tec Expo. He also is program director for the Lightwave Innovation Reviews and the Diamond Technology Reviews.
He has written numerous articles in all aspects of optical communications and fiber-optic networks, including fiber to the home (FTTH), PON, optical components, DWDM, fiber cables, packet optical transport, optical transceivers, lasers, fiber optic testing, and more.
You can connect with Stephen on LinkedIn as well as Twitter.