The worldwide optical network equipment spending was down 12 percent sequentially in the first quarter of 2016, reflecting a typical seasonal adjustment for the industry, according to IHS. However, the market notched a 13 percent year-over-year increase that was anchored by accelerating 100G investment in wavelength-division multiplexing (WDM) for both metro applications and long haul.
Metro WDM saw solid gains in Q1 2016 as well, with an increase of 15 percent compared to the same period last year. Data center expansion, public and private cloud adoption, preparation for broader introduction of 4K video and emerging virtual reality (VR) applications are expected to continue to drive the growth of bandwidth in the metro, added IHS.
IHS said that long haul WDM spending was strong in Q1 2016, growing 23 percent year-over-year. The 100G long haul market continues to be robust, with projects in China and North America underway and delivering significant revenue.
Synchronous Optical Networking (SONET) and Synchronous Digital Hierarchy (SDH) spending however continues to decline, representing just 11 percent of the total optical equipment market in Q1 2016, added IHS further.
