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» VIEW ALL POSTS Jan 8 2009   3:27PM GMT

Global optical market declines? Let’s not get global



Posted by: KateGerwig
Tags:
Network equipment
optical networking
packet optical networking

The recession feels like it will go on and on, yet so does the demand for bandwidth. So when it comes to the optical networking market, service providers need to put their recession anxiety on hold and move bravely forward.

Yes, analyst firms have huddled and are now predicting declines for the global optical equipment industry, but this is definitely not the abandon ship mode of the 2001 optical networking crash. Analyst firms are still pointing to bright spots where growth will occur anyway, despite dismal financial credit markets and capital investment projections. It all depends on what segment of the optical market you look at.

Right before the new year, Ovum revised its optical equipment forecast downward, so rather than 11% growth in 2009, Ovum says a 5% decline is more realistic. Even so, Ovum believes the optical market will start healthy growth again in 2010 to create a market worth more than $23 billion in 2013.

It’s no surprise that Ovum sees the smallest decline in metro wavelength division multiplexing (WDM) gear since metro networking is front and center for service providers this year as they gear up – literally – to handle more high-bandwidth traffic like video closer to users.

On the very long-distance end of the market, the submarine systems submarket may actually grow this year, due to transoceanic investment from traditional telecom players, as well as companies like Google. And it’s worth mentioning that submarine systems require a whole lot of optical components.

Infonetics Research is on the same page in terms of optical segment inclines and declines. Global sales of packet optical transport systems equipment should continue to grow, which means there will be gradual decreases in SONET/SDH equipment sales, according to Infonetics Research President Michael Howard, who calls the recession’s impact on the global optical network market “minimal.” Consumers and businesses are contending with more bandwidth-intensive applications, and service providers aren’t abandoning their IP transformation projects as much as maybe delaying certain expenditures for a quarter or two, but not cancelling them.

The 2009 outlook for the optical market could be called the best of the worst.

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