Another industry study shows NT's lead extending. Note: NT lead over LU (and everyone else) is WELL OVER 2x now (and growing). Cisco is still a 'no show'. Numbers are different than the other study due to, most likely, how they define the market. The results are the key. NT = king of this sector (of course that and a dime won't buy you a phone call right about now! Lol! Give it a couple of months - VBG!)
By Susan Taylor
OTTAWA, Oct 30 (Reuters) - Amid investor jitters that
fiber-optic demand is cooling, market research released on
Monday shows that optical transport system sales rose 67.5
percent over last year, but estimates for future growth do not
sustain that pace.
A report from telecommunication industry analysts Ryan,
Hankin Kent Inc. estimates North American sales for the
equipment at $20.6 billion in 2000, up from $12.3 billion in
1999.
The San Francisco-based group also lifted its estimate for
spending in 2001 to $29.3 billion. In 1999, it had forecast
spending of $19.4 billion for 2001. But the torrid growth pace
experienced in 2000 over last year is not forecast to continue.
In 2001, sales are projected to increase 42 percent over
2000 to $29.3 billion, but that rate slows to 19 percent in
2002 over 2001. In 2003, sales are estimated to grow 17.5
percent over 2002. In 2004, sales are forecast to grow just 11
percent over the previous year to reach $45.4 billion.
"What I think is noteworthy is that they are saying the
market is going to grow, but that the growth rate is going to
slow," said Michael Neiberg, analyst at Chase Hambrecht &
Quist.
The report ranked Nortel Networks Corp. <NT.N> No.1 in the
North American market with 38 percent of sales over last year's
29 percent share.
Nortel's gains come amid a slide in sales for Lucent
Technologies Inc. <LU.N>, No. 2 optical network supplier, which
has suffered from late product introduction.
Lucent's portion of North American sales slipped to 14
percent from 24 percent in 1999, while suppliers such as
Fujitsu Ltd. <6702.T> dropped from from 14 percent to 12
percent and French telecoms supplier Alcatel <CGEP.PA> went
from 12 percent to 9 percent.
The report comes as beleaguered stocks for fiber-optic
firms continue to slump on worries that an equipment spending
slowdown among phone companies and Internet service providers
will reducerevenue growth.
Investors fled the stocks last week after Lucent said its
fiber-optic sales had dropped and Nortel said its third-quarter
sales fell as customers stockpiled inventory.
"There's a certain amount of nervousness," said Brian
Piccioni, analyst at BMO Nesbitt Burns. "It becomes a question
of mood -- when people are in a selling mood they look for
excuses to sell and certainly you don't see too many reasons to
be buying."
Network suppliers such as Nortel lost as much as 7.5
percent on Monday. Lucent and Tellabs Inc. <TLAB.O> slipped
more than 4 percent.
Sycamore Networks Inc. <SCMR.O> dropped nearly 11 percent,
Ciena fell about 10 percent and Alcatel dropped 3.4 percent on
the Paris bourse.
Nortel, the world's No. 2 telecommunications equipment
supplier, was not the only company to post improved North
American sales over 1999, according to the report.
"Other vendors have done really well, although from a
smaller base: NEC, Ciena, and Sycamore," said Brian Van Steen,
an optical transport analyst at Ryan, Hankin and Kent.
Ciena's share of the market went from 2 percent to 3
percent, Cisco rose from about 0.5 percent to 6 percent, Van
Steen said. NEC Corp. <6701.T> went to 5 percent from 3 percent
and newcomer Sycamore now represents 1 percent of market sales.
The lion's share of market growth stems from wavelength
division multiplexing systems, which split light beams into
many colors to carry more data.
In 2000, phone companies and Internet service providers
will spend about $7.7 billion on WDM transport technology, with
sales expected to reach to $26.6 billion in 2004, the report
said, and Nortel controlled 57 percent of that North American
market, up from 37 percent last year. Sales rose to an
estimated $7.7 billion in 2000 from $3.43 billion in 1999.
($1=$1.53 Canadian)
REUTERS
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