Infonetics: Optical network systems revenue jumps 15% in 2Q12

After a down quarter over the first three months of 2012 (see "Infonetics: Optical network spending slips 23% in 1Q12"), optical network systems manufacturers saw sales increase sequentially by 15% in 2012, according to market research firm Infonetics Research. However, year-on-year, 2Q12 was off 10% Infonetics says in its 2Q12 Optical Network Hardware vendor market share report. For many companies, future prospects depend on their product mix, says Infonetics "The optical hardware market outlook looks decidedly different depending on which market you sell into," explains Andrew Schmitt, principal analyst for optical at Infonetics Research. "While spending on WDM is reasonably healthy, SONET/SDH is sailing off a cliff. Vendors who have good WDM products but large exposure to SONET/SDH are struggling to replace lost revenue fast enough to show growth." For example, North American SONET/SDH spending shrank 45% in the second quarter year-over-year. Those companies with heavy exposure to AT&T suffered in particular, as that carrier has cut its SONET spending significantly. Overall, WDM equipment now accounts for 80% of all optical spending in North America, according to Infonetics. Huawei extended its market share lead during the quarter, thanks in part to an uptick in spending by carriers in the Asia Pacific sector. Winds from this direction will continue to fill Huawei’s sails as well as boost ZTE, Schmitt believes. "Asia Pacific notched a big increase in the second quarter, with large seasonal gains by Huawei and ZTE,” he says. “Despite tepid growth in the first half of 2012, we expect significant growth in optical spending in China, where ZTE continues to take market share from Huawei."