Market Share: 1Q09 Optical networks, Global and Regional

Market Share: 1Q09 Optical networks, Global and Regional

Huawei blew the doors off what is typically a seasonally slow quarter by posting $790 million in optical networking (ON) revenues compared with traditional market leader Alcatel-Lucent's $639 million. The Chinese and Indian markets are on fire while North America remains ice-cold, which, coupled with the strength of the US dollar compared with the euro, has helped Huawei and ZTE and hurt Alcatel-Lucent, Nortel, Nokia Siemens, Cisco, and others. Spending of $3.5 billion for the quarter is largely in line with our $15.4 billion forecast for the year.

• Executive summary
• In a nutshell
• Ovum view
• 1Q09 quarterly results
• Changes to our ON share reporting, commencing 1Q09
• Global spending down 18% from 4Q08 and 9% from 1Q08
• Key messages
• Battle of the titans: Huawei upsets Alcatel-Lucent to grab the 1Q09 lead; Alcatel-Lucent hangs onto the annualized share lead…for now
• Changes in top ten market positions: ZTE and Ciena move up, Nokia Siemens and Tellabs move down
• Macroeconomic malaise, differentially severe in North America and western Europe, is a significant factor in share changes…
• …but it's not the only factor: strategy matters
• Market share — global
• Spending shifts to emerging markets and WDM segments continue to shake up the vendor field
• Market share changes
• Analysis of quarterly results
• Market growth and outlook
• Strong 1Q09 spending in China and India raise Asia-Pacific spending results above expectations so far in 2009
• Regional analysis — all regions
• Asia-Pacific spending grows as a slice of global, largely at the expense of North America
• Product-level analysis
• Segment overview
• Challengers' interest in SLTE market grows despite lumpy spending and Alcatel-Lucent's solid control of the top spot
• Regional analysis — Asia-Pacific
• China drives 31% year-over-year growth in AP; mobile spending pushes aggregation back above 60% of total
• Market share changes
• Analysis of quarterly results: Huawei even more dominant than usual, as race for second place continues among Alcatel-Lucent, ZTE, and NEC
• Subregional Asia-Pacific results
• Market growth and outlook
• 2009 spending on track with forecast
• Product-level analysis
• Aggregation segment proves resilient due to wireless carriers, even as CPO adoption is slow; ROADM-based metro WDM network builds continue
• Regional analysis — EMEA
• 1Q09 spending down 16% year over year; market leader Alcatel-Lucent just slightly ahead of Huawei for the quarter
• Market share changes
• Analysis of quarterly results: Huawei and vendors with metro WDM strength did well in 1Q09, but Alcatel-Lucent still has commanding lead
• Subregional EMEA results
• Market growth and outlook
• 2009 spending on track with forecast
• Product-level analysis
• WDM continues to hold up relatively well as 40G buildouts begin; CPO and ROADM segments account for roughly 10% of total spending combined
• Regional analysis — North America
• Market continues to slide as spending remains weak; 1Q09 market retreats to lowest level in 15 quarters
• Market share changes
• Analysis of quarterly results: Fujitsu zeros in on Alcatel-Lucent's lead
• Market growth and outlook
• North American ON spending hampered by the economic slowdown; market contraction spills over into 1Q09
• 2009–14 outlook
• Product-level analysis
• 1Q09 saw broad-based revenue declines in market segments; metro ROADM and 40G are driving share shifts
• Regional analysis — SCA
• Small SCA regional market tumbles more than global average sequentially, but less compared with 1Q08
• Market share changes
• Despite lumpy spending patterns, share trends show less movement and volatility than in other markets
• Market growth and outlook
• SCA ON spending hampered by the economic slowdown and financing uncertainty, but upside coming from Chinese vendor financing
• 2009–14 outlook
• Product-level analysis
• SCA WDM spending showing more strength than aggregation and bandwidth management
• List of Tables
  • Table 1: Analysis of quarterly results, global ON
  • Table 2: 1Q09 global ON spending versus revised 2009 forecast
  • Table 3: Analysis of quarterly ON results, Asia-Pacific
  • Table 4: Market share by subregion, Asia-Pacific ON, 1Q09
  • Table 5: 1Q09 Asia-Pacific ON spending versus revised 2009 forecast
  • Table 6: Product segment-level market assessment: Asia-Pacific
  • Table 7: Analysis of quarterly ON results, EMEA
  • Table 8: Market share by subregion, EMEA ON, 1Q09
  • Table 9: 1Q09 EMEA ON spending versus revised 2009 forecast
  • Table 10: Product segment-level market assessment: EMEA
  • Table 11: Analysis of quarterly ON results, North America
  • Table 12: 1Q09 North American ON spending versus revised 2009 forecast
  • Table 13: Product segment-level market assessment: North America
  • Table 14: 1Q09 SCA ON spending versus revised 2009 forecast
  • Table 15: Product segment-level market assessment: SCA
• List of Figures
  • Figure 1: Global ON market revenues by quarter, 2Q07–1Q09
  • Figure 2: Foreign exchange shifts complicate market analysis
  • Figure 3: Comparison of annualized ON market share for the top five global vendors
  • Figure 4: Market share (rolling 4 quarters), global ON
  • Figure 5: Market share gains and losses, global ON
  • Figure 6: Global ON market by region, rolling 4 quarters
  • Figure 7: Global ON market by segment, rolling 4 quarters
  • Figure 8: Rolling 4Q spending in aggregation vs. metro WDM, global
  • Figure 9: Market share (rolling 4 quarters), Asia-Pacific ON
  • Figure 10: Comparison of annualized ON market share for the top four Asia-Pacific vendors
  • Figure 11: Market share gains and losses, Asia-Pacific ON
  • Figure 12: Market share (rolling 4 quarters), EMEA ON
  • Figure 13: Comparison of annualized ON market share for the top four EMEA vendors
  • Figure 14: Market share gains and losses, EMEA ON
  • Figure 15: Market share (rolling 4 quarters), North American ON
  • Figure 16: Comparison of annualized ON market share for the top four North American vendors
  • Figure 17: Market share gains and losses, North American ON
  • Figure 18: Comparison of annualized ON market share for the top four South and Central American vendors