Recent reports from Dell’Oro Group reveal a 4 percent year-over-year contraction in the North American Optical Transport equipment market during the third quarter of 2023. This stands in stark contrast to the consistent growth of 6 percent witnessed outside the North American region over the same period.
According to Jimmy Yu, Vice President at Dell’Oro Group, the market dynamics within North America differed notably from other parts of the world. The region experienced a surge in demand for optical equipment due to supply chain disruptions and component shortages. However, as component supply gradually improved, service providers found themselves inundated with more equipment than required. This surplus led to a slowdown in new orders, prompting requests to defer deliveries into 2024.
Yu elaborated on the divergent market scenarios across regions, attributing the varied dynamics to a multitude of factors. These include Covid-related policies affecting economic growth in certain countries and conflicts impacting others, leading to a lack of inventory buildup among service providers in these regions during early 2023.
Despite these regional fluctuations, the global Optical Transport market is projected to maintain an average annual growth rate of 3 percent, estimated to reach a value of $16 billion by 2024.
The North American and Latin American regions faced year-over-year declines in 3Q 2023, attributed to a mix of challenges including surplus inventory, deteriorating macro-conditions, recession concerns, and increased borrowing costs.
Over the trailing four quarters, Ciena, FiberHome, and Nokia emerged as significant players, each gaining over one percentage point of market share compared to the previous year.
The market outlook reflects an intricate interplay between supply chain dynamics, geopolitical scenarios, and macroeconomic factors, influencing the trajectory of the Optical Transport industry globally.
This market insight signifies a nuanced landscape, wherein regional disparities and evolving market conditions continue to shape the future trajectory of the Optical Transport market.
