Huawei beats Alcatel-Lucent in 1Q09 to top optical networking market

UK: Ovum announced its preliminary 1Q09 results for global optical equipment networking vendors. The global optical networking (ON) market, led by strength in Asia-Pacific markets, was $3.6 billion, down 15 percent sequentially and down 8 percent compared with 1Q08.

"This marks the second time in two quarters that the ON market has shrunk compared with the year-ago quarter, but given the global financial meltdown the situation could have been much worse." remarks Ovum’s Vice President, Optical Networking, Dana Cooperson.

"Spending in Asia-Pacific was surprisingly strong. We did not see the seasonal decline we normally expect in China, for example, as the race to build 3G mobile networks and support them with transport capacity obliterated any seasonality or macroeconomic downturn factors. Huawei, posting a remarkable $790 million in revenue to lead the market for the quarter, benefited from China’s 3G race, along with teledensity growth in India, a strong and stable currency, and comparatively little exposure to the cool North American market, while Alcatel-Lucent suffered from much of the opposite," Cooperson added.

Top 10 optical networking vendor share
Of the top 10 vendors, none posted both sequential and year-over-year revenue gains, reflecting slowing spending in much of the world. Vendors who beat both the sequential and year-over-year average market declines of 15 percent and 8 percent, respectively, include Ericsson, Huawei, and NEC.

Those three vendors, plus ZTE, were the only top ten vendors that did not post revenue declines compared with 1Q08. Huawei and ZTE grew revenues by more than 40 percent and 20 percent, respectively, over 1Q08 in part due to 3G mobile-related spending in China.

"Alcatel-Lucent held on to the market lead with 21.7 percent annualized share, but Huawei picked up 1.8 percentage points to come within 3 points of the market leader at 19.1 percent share. Given the continued strength of spending in markets where Huawei is strong, its light exposure to weaker markets, and the firm’s seemingly bottomless availability of financing, this looks like a huge year for the Chinese giant.” said Cooperson.