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Gartner analysis predicts recovery in optical market by 2003

Wed, 02/13/2002 - 7:00pm
Anne Kerven

It's no secret that the worldwide optical transmission systems market struggled in 2001 as revenue declined 10 percent, but, surprisingly, the market is forecast to show positive growth in 2002, according to new analysis from Dataquest Inc., a unit of Gartner Inc.

In 2001, worldwide optical transmission revenue totaled $30.3 billion, down from $33.8 billion the prior year. The industry is not projected to surpass 2000 revenue results until the end of 2003. In 2002, worldwide optical transmission revenue is forecast to reach $32.6 billion and then grow to $36 billion in 2003.

But the industry will undergo significant change during that time, too. "Its nature will have changed significantly," says Peter Kjeldsen, senior analyst with Gartner Dataquest's EMEA Telecommunications group. "Consolidation in the market will have changed the number of vendors and operators, and their relative strengths are likely to have changed as well."

He adds that the drivers for this change include a continued increase in the demand for bandwidth, introduction of an optical layer to handle DWDM channels intelligently and a continued migration of the fiber optic technology towards the edge of the network - most noticeably in metro networks.

Gartner's research shows significant regional differences as well. Based on revenue, North America is the dominant region, followed by Western Europe and Asia/Pacific. In terms of technology, SDH/SONET dominates, with dense wavelength division multiplexing (DWDM) in second place. The North American and Western European markets declined 19.6 percent and 2.3 percent respectively, in 2001. The bright spot was the Asia/Pacific market, which grew 18.8 percent, driven by the Chinese market, which grew 27.3 percent.

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