Cignal AI: Global optical hardware spend increases

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Research firm, Cignal AI has released its latest Optical Hardware Report for the second quarter of 2019. It found that optical hardware spending grew in every region and for every business segment during that period.

According to the report, Huawei retained the top market share worldwide, despite a slowdown in China and increasing competitive and political pressures. This quarter marked a turnaround for the Caribbean and Latin America region, with a year-on-year growth of 30 per cent. The Europe, Middle East and Africa region also expanded across all product segments. Overall growth in North America was minor and cited as mainly because of an SLTE revenue increase this quarter. Finally, the rapid expansion in Japan for the past few quarters settled down to a more moderate pace with Ciena, NEC, and Huawei as the prime beneficiaries.

The report also found that wavelength-division multiplexing (WDM) long haul spending went up, recovering in all regions except Japan, as compact modular equipment and new high-speed coherent optics impact investments. WDM metro declined in North America but grew in other regions. Factors cited include the lower price per bit of new high-speed optics and competing priorities like the 5G rollout.

In addition, growth in the Asia-Pacific (APAC) and EMEA regions offset Synchronous Optical Network (SONET)/ Synchronous Digital Hierarchy’s (SDH) ongoing decline in North America. This growth comes from expansions and upgrades to existing networks, rather than new builds. Coherent optic shipments are also tracking to reach nearly one million 100G equivalent ports in 2019, representing a 40 per cent increase in bandwidth over 2018.

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