Huawei Overtakes Alcatel-Lucent as Top Optical Vendor in Q1

Huawei has edged out Alcatel-Lucent to become the No. 1 global optical networking market leader for the first quarter of 2009.

Alcatel-Lucent held on to the overall market lead with 21.7 percent annualized share, but Huawei picked up 1.8 percentage points to come within 3 points of the market leader at 19.1 percent share, according to Ovum Ltd..

The global ON market, led by strength in Asia-Pacific markets, equaled $3.6 billion, down 15 percent sequentially and down 8 percent compared with a year ago.

“This marks the second time in two quarters that the ON market has shrunk compared with the year-ago quarter, but given the global financial meltdown the situation could have been much worse,” said Dana Cooperson, vice president of optical networking at Ovum. “Spending in Asia-Pacific was surprisingly strong. We did not see the seasonal decline we normally expect in China, for example, as the race to build 3G mobile networks and support them with transport capacity obliterated any seasonality or macroeconomic downturn factors.”

Huawei, posting a remarkable $790 million in revenue to lead the market for the quarter, benefited from China’s 3G race, along with teledensity growth in India, a strong and stable currency, and comparatively little exposure to the cool North American market, while Alcatel-Lucent suffered from much of the opposite, she added.

Of the top 10 vendors, none posted both sequential and year-over-year revenue gains, reflecting slowing spending in much of the world. Vendors who beat both the sequential and year-over-year average market declines of 15 percent and 8 percent respectively, include Ericsson, Huawei and NEC.

Those three vendors plus ZTE were the only top 10 vendors that did not post revenue declines compared with a year ago. Huawei and ZTE grew revenue by more than 40 percent and 20 percent, respectively, year-over-year, in part due to 3G mobile-related spending in China.

“Given the continued strength of spending in markets where Huawei is strong, its light exposure to weaker markets, and the firm’s seemingly bottomless availability of financing, this looks like a huge year for the Chinese giant,” said Cooperson.

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