Wednesday March 7, 5:39 pm Eastern Time
Nortel No. 1 in telecom equipment sales - study
(UPDATE: Figures in U.S. dollars)
By Susan Taylor
OTTAWA, March 7 (Reuters) - Nortel Networks Corp. (Toronto:NT.TO - news) (NYSE:NT - news) has gained ground to take top spot as the world's No. 1 telecommunications equipment manufacturer according to market research released on Wednesday -- but the victory comes amid a dramatic downturn in customer spending.
A new study from Gartner Dataquest, which runs market research and analysis for the information technology sector, shows that Nortel grew more than 40 percent to leapfrog to number one in 2000 from number three in 1999.
Ranked by estimates of telecommunication equipment sales in 2000 for the world's top eight suppliers, Nortel led the pack with revenues of $29.8 billion.
``It's done a number of things well -- it's active in all the key segments,'' said Dean Eyers, vice-president for telecoms at Gartner Dataquest. ``In particular it has executed well in the area of optical technologies.''
Ericsson maintained its rank as number two with telecom revenues of $27.7 billion, paced by its leadership in the wireless network market.
Nokia moved to third spot from fourth in 1999 with telecom revenues of $27.2 billion, underscored by a strong showing the wireless market.
Lucent Technologies Inc. (NYSE:LU - news), the market leader in 1999, dropped to fourth, with telecom revenues of $25.8 billion. Lucent revenues excludes sales from its Avaya Inc. (NYSE:AV - news) spinoff, which would have boosted total sales to $33.2 billion.
Cisco Systems Inc. (NasdaqNM:CSCO - news) surged to number five from number eight, with telecom revenues of $23.9 billion, while Siemens AG dropped to sixth spot from fifth with telecom sales of $22.8 billion.
Motorola Inc. (NYSE:MOT - news) was tied for sixth spot with telecom revenues of $22.8 billion. Alcatel slipped to eighth spot from seven with telecom sales of $21.6 billion, which excludes revenues from its components business spinoff.
The timing of Nortel's market leadership, however, comes amid a clampdown in spending by phone companies and Internet service providers that has sparked a rash of earnings warnings and crumbling stock prices.
``A lot of companies are in belt-tightening mode right now,'' said Eyers. ``There is neither the capital (nor) the free-spending spirit about that there was 18 months ago, if you like, pushing the market as fast as it was.''
Customers are also adding more traffic to the network equipment they have already purchased rather than buying new gear to meet future demand.
``We do see the next year or so, particularly in the U.S. market, as being tougher, and I think you've seen that reflected in some of the announcements that some of the companies have made,'' Eyers said.
Citing a more severe U.S. economic downturn than expected, Nortel slashed its revenue growth forecast last month to 15 percent from 30 percent and earnings growth forecast to 10 percent from 30 percent. The company also said it would cut 10,000 jobs.
($1 equals $1.55 Canadian) |
