Cignal AI analyst on 4Q20 North American optical transport market: ‘It's really, really, really ugly. Really.’
Thanks to the spending that took place during the first half of the year to address bandwidth demand related to COVID-19, North American network operators apparently had little interest in spending more in the final six months of the year, according to Cignal AI. After reporting a downturn in the third quarter (see “North American cloud and colo spending on optical hardware goes negative in 3Q20: Cignal AI”), the slippage continued in the fourth quarter, the market research firm reports in its most recent Transport Hardware Report. As Scott Wilkinson, transport hardware lead analyst at Cignal AI, put it in a Tweet after the 4Q21 results were first tabulated: “It's really, really, really ugly. Really.”
While the early year spending in North America raised hopes for a banner year in optical network hardware sales, Cignal AI reports that full-year sales ended slightly down versus 2019 levels. Ciena and Infinera reported flat year-on-year sales and Cisco, Nokia, and Fujitsu announced declines, Cignal AI noted. Sales of packet switching and routing gear in North America followed a similar trend downward, at -20% for the quarter. Similarly, European spending trends improved in the final quarter of 2020 but were down on an exchange rate adjusted basis. This led to full-year sales in EMEA that Cignal AI termed “steady.”
“Despite the massive disruptions during 2020, overall spending declined only slightly in 2020,” commented Wilkinson via a Cignal AI press release. “But this quarter, almost all vendors felt the impact of capex pulled forward in the year due to operators scrambling to secure safety stock.”
Separately, Wilkinson expressed optimism that the situation will improve this year.
Cignal AI’s Transport Hardware Dashboard is available to subscription clients of the Transport Hardware Report. The dashboard provides real-time market data with vendors’ results as they are released, says the market research firm. Users can manipulate variables online to view information in a variety of ways, as well as download Excel files with current snapshots of market reporting.
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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.