Spending on optical networking equipment dips in 2Q12

London, August 30 – A report from Ovum shows that global spending on Optical Networking (ON) equipment declined in the second quarter of 2012 in spite of increases in SCA of 19 percent and a 6 percent APAC spending surge. Implications suggest a limited margin for growth over 2011.

Preliminary analysis of the 2Q2012 showed an 8 percent drop in spending from quarter 2Q2011, down to $3.8 billion, which constitutes the second consecutive year-over-year decline. The decline was driven by spending shrinks of 19 percent in the EMEA and North America markets, which respectively purchased $950 million and $876 million worth of receipts.

Speaking on the data from the report, Ovum’s Vice President and Practice Leader of Network Infrastructure Dana Cooper reflected:

“It will be very challenging to make the 2 percent growth we’ve predicted for the year, although as Asia-Pacific and SCA become a larger part of the global market, spending is shifting strongly to the fourth quarter.”

The historic decline from 2Q to 3Q necessitates a large increase in 4Q to reach 2012 projections, made increasingly difficult by poor prospects in the EMEA, though North American tier 2s are improving.

The market will need a big 4Q12 to boost 2012 spending. But, as third quarter spending historically declines from 2Q, Ovum does not assume any improvements next quarter.

More information on the report can be found at http://ovum.com/research/market-share-alert-2q12-global-on/.