China-based Huawei is at the top of the optical networking vendor pile for the first time in Ovum’s preliminary Q1 2009 results. The bigger news is that this puts Huawei ahead of optical-stalwart Alcatel-Lucent in the first three months of the year, but not for the past 12 months overall. And while optical network spending is down compared to 2008 for the past two quarters, Asia-Pac spending was remarkably strong.
Specific reasons for Huawei’s performance are varied, but they include China’s 3G network build-out race, in which Huawei figures prominently as a vendor of choice, according to Ovum’s Dana Cooperson, VP of optical networking. And like Las Vegas, what’s sold in Asia-Pac is often deployed in Asia-Pac.
But Huawei’s rise is more than that of preferred regional vendor. We’re in a global recession, which is the perfect climate for the low-price vendor to gain market share. A player in China for the past 10 years, Huawei wasn’t big on the world vendor stage all that long ago, and routine questions included how to spell and pronounce the company’s name.
That part is history, especially in optical networking, where Current Analysis optical analyst Jason Marschek notes the company is beginning to shed its low-cost competitor image and gaining in the “cutting edge optical solutions” category as it moves toward delivering all-IP optical transport gear.
In upping the pressure on competitors, take note that almost half of Huawei’s employees are devoted to R&D. Still, the company has a long way to go in terms of displacing traditional European and North American vendors, particularly in offering professional services. But the recession has been good to Huawei. We’ll see how it goes as the economy improves and the market sorts itself out in a brave new post-recession world.