2013/11/22 Pricing pressures drive down ROADM component market in first half of 2013

Boston, MASSACHUSETTS, November 20, 2013—Market research firm Infonetics Research released excerpts from its latest ROADM Components report, which tracks the reconfigurable optical add/drop multiplexer (ROADM) optical network equipment market and the wavelength selective switch (WSS) components within it.

ANALYST NOTE

"ROADM equipment spending has grown at a healthy pace in the past 12 months due to a surge in 100G deployments, but there has not been an accompanying lift in WSS components,” notes Andrew Schmitt, principal analyst for optical at Infonetics Research.

Schmitt continues: “WSS revenue as a share of WDM ROADM equipment has fallen to five-year lows, though there should be a reversal due to upcoming greenfield deployments of 100G.”

• WDM ROADM-based optical equipment is the fastest growing optical transport segment, outstripping the overall WDM market
• In the first half of 2013 (1H13), global revenue for WDM ROADM equipment (excluding components) totaled $2.2 billion, up 17% from the same period a year ago (1H12)
• A mild increase in unit shipments (+5%) and continued pricing pressure combined to drive down WSS component revenue 9% year-over-year in 1H13
  • WSS revenue is down 44% from a spending peak in 2H10
• Infonetics expects WSS component unit growth to outstrip revenue growth through 2017 due to price reductions and a later shift to smaller 1x4 WSS