North American Optical Market Contracts in 3Q 2023

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In the third quarter of 2023, the North American Optical Transport equipment market experienced a 4 percent year-over-year contraction, according to a recent report by Dell’Oro Group, a leading source for market information in telecommunications, security, networks, and data centers. This stands in stark contrast to the global market, which saw a positive trend for the third consecutive quarter, growing by 6 percent year-over-year outside the North American region.

Jimmy Yu, Vice President at Dell’Oro Group, attributed the unique market dynamics in North America to supply chain and component crises, which triggered a surge in demand for optical equipment. However, when component supplies stabilized, service providers found themselves with more equipment than required. This led to a temporary halt in new orders, prompting requests to postpone deliveries into 2024.

The report highlighted that market dynamics varied in other regions due to factors such as Covid-related policies affecting economic growth and conflicts in some countries. As a result, service providers in these regions did not build up inventory in the early months of 2023.

Key findings from the 3Q 2023 Optical Transport Quarterly Report include a projection for the global Optical Transport market to grow at an average annual rate of 3 percent, reaching $16 billion by 2024. However, the North American and Latin American regions faced year-over-year declines in 3Q 2023, attributed to issues like excess inventory, deteriorating macro-conditions, recession fears, and increased borrowing costs.

In terms of market share, Ciena, FiberHome, and Nokia emerged as significant players, each gaining over one percentage point in the trailing four-quarter period compared to the previous year. The report underscores the intricate interplay of global and regional factors influencing the optical transport equipment market and highlights the resilience and adaptability required in this dynamic industry.

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