Optical networking market hits $3 billion in 4Q05 to reach $11 billion for the year

Ovum-RHK : Alcatel and Huawei each grow revenues over 30 percent in the quarter and were the only vendors to post over $1 billion in optical networking revenue for the year, with Alcatel topping $1.7 billion.

Preliminary analysis of fourth quarter and full-year 2005 results for optical networking equipment vendors. In the fourth quarter, revenues for the segment grew 7 percent versus last year, and 8 percent sequentially.

4Q05 and full-year 2005 highlights for the Optical Networking Equipment Market:

• 4Q05 revenues = $ 3.0 billion, up 7 percent versus 4Q04

• 2005 revenues = $ 11.0 billion, up 17 percent when compared to full-year 2004

• Alcatel revenues increased 34 percent sequentially; 3 percent vs. 4Q04

• Huawei revenues increased 44 percent sequentially; 6 percent vs. 4Q04

• Alcatel and Huawei each gained over 3 points of market share

• Lucent and Fujitsu each lost over two points of market share

The EMEA (Europe, Middle East, Africa) and Asia-Pacific regions each grew over the market average sequentially for the quarter while the North American market was slightly down as Verizon put on the spending brakes. Growth in CALA (Caribbean and Latin America, by far the smallest regional optical networking equipment market) just missed the global pace. All regions grew over 10 percent in 2005 relative to 2004, marking continued strong growth in North America and EMEA and a return to growth in both Asia-Pacific and CALA. Growth in 2005 was robust in all next-generation ON product segments, with the multiservice SONET/SDH ADM (aka MSPP) market, the ON largest equipment segment, approaching $5 billion and the healthy metro WDM segment topping $1.4 billion for the year.

The strength of the 2005 market derives from the optical network's key role as the foundation of broadband multiservice networks. The capacity and agility of today's optical gear makes possible the economical transport and management of the flood of broadband video and data services that operators around the globe are launching to support residential and enterprise customers. The current generation of optical gear meets the new services' bandwidth, security, resiliency, and flexibility needs. The vendors who are thriving in this growth market are those that can meet customers' needs for cost-effective multiservice platforms backed by excellent service and support. Fourth quarter and full-year 2005 results for optical networking equipment vendors Publ 20060221