Meanwhile, interest in 400ZR pluggable optical modules is growing so fast that sales threaten to outstrip supply.

The share of pluggables among all optical ports should grow steadily through 20204.

Source: Cignal AI

Sales of compact modular systems – small platforms designed for use in open, disaggregated architectures -- grew 24% year-over-year in the third quarter of 2020 (3Q20), according to Cignal AI. The market research firm states in its newly released Transport Applications Report that this popularity helped the overall optical network systems hardware space to exceed the previous year’s revenue totals by 7% during the quarter. Meanwhile, interest in 400ZR pluggable optical modules is growing so fast that sales threaten to outstrip supply.

Sales of compact modular systems were particularly strong in Asia-Pacific, which saw spending on such platforms jump more than 75% during 3Q20. Huawei (mostly in China), Fujitsu (in Japan), and Nokia each more than doubled their sales in the region. Globally, Ciena saw its compact modular sales spike 18% versus the year-ago quarter to maintain its market share lead in this niche.

“Compact modular is gaining popularity with a wider set of network applications and operators due to the continued adoption of disaggregation outside cloud and colocation,” said Scott Wilkinson, lead analyst at Cignal AI. “The market saw extraordinary growth in Asia-Pacific over the last two quarters, with sales in the region now approaching those of EMEA.”

That said, Cignal AI predicts that growth in compact modular sales will decelerate to the low single digits in 4Q20 as capex budgets empty, particularly in North America.

Elsewhere, the quarter also saw the market for 400ZR optical modules begin to take shape. Cignal AI reports that several hundred such modules shipped for testing and evaluation in the quarter. “The demand pipeline for 400ZR remains strong and operators are pleased with the prototypes under evaluation,” said Andrew Schmitt, directing analyst at Cignal AI. “Acacia had a huge quarter thanks to a large buildout at Amazon AWS.”

Cignal AI remains bullish on pluggable coherent optics, which the market research firm projects will compose 40% of the high-performance optical market by 2024 (see “Cignal AI: Expect coherent pluggables wave to reshape networks” and the figure at the top of the page). Overall, shipments of fixed 400-Gbps and above coherent ports reached more than 35,000 ports in 3Q20, a sequential increase of 65%.

Cignal AI’s Transport Applications Report provides market size, market share, and forecasts for revenue and port shipments for optical equipment designed to meet specific applications, including coherent optical technology, compact modular, and advanced packet-OTN switching hardware. Vendors examined include Acacia, ADTRAN, ADVA, Ciena, Cisco, Ekinops, Fujitsu, Huawei, Infinera, Inphi, NEC, Nokia, NTT Electronics (NEL), Ribbon Communications, and ZTE.

https://www.lightwaveonline.com/business/market-research/article/14195954/optical-network-market-led-by-compact-modular-systems-up-7-in-3q20-cignal-ai