Page 38 - Market Analysis Report of Optical Communications Field in China & Global market 2015

optical fiber and cable export grew very fast. In
2014, Chinese optical fiber and cable makers took
as large as 55% of the global market share. In
2013 that number was 50%.
Unbalanced global optical fiber and cable
development means the market is far from being
saturated. Overseas market is a bigger, more fair
and serious arena. Simply copy the domestic optical
fiber and cable market to overseas market is not
feasible. Attention must be paid to differentiation and enjoyed a strong quarter-on-quarter increase.
localization. The trickiest issue most of the Chinese
enterprises face when they explore the international
market is innovation and cultural difference.
Therefore, except exports those companies also
promote their localization operation in foreign
countries. Hengtong takes the initiative to make
clear internationalization strategy. It set up 26
overseas technology marketing centers in Europe,
Southeast Asia, south Asia, Africa and Middle East.
It also established research and development centers
and manufacturing factories in South America and
south Asia trying to attract local talents.
Changing from simple exports to setting up foreign
factories and cultivating localization services, the
localization of optical fiber and cable enterprises
are entering into a new era from the original market
resources internationalization to a comprehensive
internationalization marked by brand, production
and service internationalization rolled into one.
2.Scale and features of optical network market
Development of global optical network market
The report by telecom network information
institute shows that the annual increase of global
WDM equipment has registered 6% to $10billion.
In 2014, the segmentation of North American
optical network market was obvious. ADVA,
Infinera and Ciena had a very good performance,
while traditional makers like Alcatel-Lucent,
Fujitsu and Coriant were weak. Manufacturers
who relied on operators didn’t perform very well.
Ovum, a global analysis firm, discovered that in 2015
global optical network expenditure has comparative
growth on moving base for three consecutive
quarters, with an year-on-year growth of 2.3% and
quarter-on-quarter growth of 25% to $3.9 billion.
In 2015, the annual optical network expenses
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increased to $14.2 billion. Driven by the strong
demand for backbone WDM/CPO-T and SLTE,
the share of Alcatel-Lucent, Ciena, FiberHome
Communications and Infinera increased. In 2015,
the backbone expense has a quarter-on-quarter
growth of 32% and with a year-on-year growth
of 11%. At the same time, SLTE’s expense has
reached its peak in recent two and half years. Even
though under the adverse effect of euro against
dollar, optical network market all around the world
EMEA has showed its strong momentum.
In 2015, global optical market expense increased
when the telecom’s expense shrank by 5%, which
according to Ovum should give credit to robust
100G and ICPs’ s rising as a new buyer of DCI.
Ovum pointed out that DCI ‘s market size has
climbed to $4.6 billion all the four quarters.
High capacity transmission has a very major effect
on optical network market, especially in North
America where many ICPs are deploying over
100G or even more speed rate to connect very large
data centers. By this quarter, the annual high-speed
optical spending has exceeded $5.5 billion, with a
year-on-year increase of 15%. During this time, the
total bandwidth of shipment topped 72.6Eb, with
a year-on-year growth of 25%. At the beginning of
this year, it was estimated that the optical network
market would increase by 4.2% to $14.5 billion.
It turned out the market behavior was the same as
expected in 2015. However, there are still some
cautiously optimistic scholars out there. The recent
turbulence of financial market will not have a large-
scale impact on optical network spending.
Highlights of optical network hardware
market
Although in 2014 global WDM optical network
hardware gained growing revenue, the revenue of
SONET/SDH equipment dropped by 25%.
Q414 global optical network hardware market
(including WDM and SONET/SDH) enjoyed a
quarter-on-quarter increase of 7%, a year-on-year
increase of 3% to $3.2 billion.
In 2014 global optical network market shrank 1%
compared with that of 2013.
Q414 EMEA market saw a quarter-on-quarter
sharp increase by 50%.
In 2014 Cienea won Alcatel-Lucent by a narrow margin
as the second largest optical network equipment
supplier, while Huawei remains its first place.
Infinera, the fastest growing supplier in North America
and EMEA market, made a hit in 2014, with its
revenue increasing by 23%, while Ciena’s was 12%.
In 2014, Cisco’s annual revenue of optical network
increased by 2.4%.
3.Size and features of optical device market
Development situation of global optical
device market
Market share of global optical device suppliers in
2014
Global optical device industry doesn’t have a high
market concentration. American company Finisar,
top one on the list, just takes less than 1/5 of the
market share. Domestic optical network equipment
manufacturers have taken more than 40% of the
global market share. In 2014 Huawei’s market
share has reached 26%, topping the list.
The semi-annual optical communication market
intelligence report published recently by
LightCounting shows that in 2015 global optical
device and module market share would reach
$5.6billion and it would increased to $8.9 billion
by 2020. Sales revenue of 100G optical transceiver
and related devices is expected to exceed $1
billion, to reach $3.3 billion by 2020.
The data traffic capital expenditure of top 15 Web
2.0 companies increased by about 30% compared
with that of the last year in the first quarter of 2015.
The spending of telecom dropped 3%，far below
the average increase rate of 5% of five years. Strong
dollar and seasonal turbulence are part of the reason.
Annual capital expenditure should be close or even
exceed $200billion in 2015. It is estimated that the
expenditure of the top 15 Web 2.0 enterprises is
$50billion.
The first quarter of 2015 saw very moderate
telecom equipment sales revenues. Behind this
number we can see that China’s OEM sales
increased, while the European manufacturers
created a dropping sales. Even though most of the
European suppliers calculate sales by euro, thus
their sales volume increased, in terms of dollar
appreciation, their sales fell.
In the first quarter of 2015, the sales volume of
digital communication equipment grew by 4%,
which could save the bad performance of the last
couple of quarters. Cisco ‘s profit went up a little bit