Sales of optical networking equipment waned for the first time in nearly two years during 1Q12, while a decline in spending wiped out gains made in 2011, Ovum claims.
The research firm states global revenues fell 9% year-on-year during the quarter and annualized spending by $300 million (€234 million). The Europe, Middle East and Africa region was hit hardest, with sales down 15% year-on-year, which Ovum notes is the largest decline in two years. While sales in North America also fell – down 8% year-on-year -, the region was the best performer of those analyzed.
Ovum also claims that sales in China and Europe suffered above average quarter-on-quarter declines in the opening three months of the year, resulting in Huawei posting its worst quarterly revenues since 3Q07, and Alcatel-Lucent its poorest since 2005.
However, Infrastructure practice leader Dana Cooperson says the figures are more a cause for concern than outright alarm. “While 1Q sales are typically lower than 4Q sales, actual spending last year overshot our $14.9 billion forecast when results in Asia Pacific and Europe were less negative than we predicted,” she notes.
The better-than-expected performance in 2011 leads Cooperson to believe the weakness predicted was carried through to 1Q12. “Also, 4Q/1Q market seasonality is becoming more pronounced as spending, and spending growth, shifts to Asia Pacific and South and Central America, in which case sales should rebound more than is typical in 2Q12,” she states.