Optical components hit 5% growth

The global optical components market posted its fourth consecutive quarter of single-digit growth with an increase of 5%, an Ovum report said.

The report said this market also posted a 23% gain over the same period last year, in part because the quarter was hard-hit by inventory corrections.

Daryl Inniss, Ovum analyst and author of the study however warned that these gains are tempered by the recent turmoil experienced in the financial markets including the sale of Merrill Lynch, bailout of AIG, and bankruptcy of Lehman Brothers.

The events are sufficiently large that the telecom market will likely be affected. But even before these events, optical components vendors were seeing evidence of market softness, Ovum said.

Avanex, for example, guided to lower sales due in part to the slowdown in Asia. JDSU reported market uncertainty due to economic conditions, citing changes in the purchasing behavior North American carriers as examples.

At the optical networking level, both Nortel and Ciena have lowered their guidance. Still, Inniss said, notwithstanding market uncertainty, traffic growth, dominated by IP data, continues.