Market research firm Infonetics Research on Thursday released excerpts from a pair of recently published forecast reports, which tracks Ethernet, TDM, and hybrid microwave equipment by spectrum, capacity, form factor, and architecture, and Millimeter Wave Equipment, which tracks unlicensed E band 60GHz, licensed E band 70--90GHz, and W band 75--110 GHz millimeter wave equipment by network application.
According to the Infonetics (Campbell, Calif., USA) report, Huawei (Shenzhen, P.R.C.) took microwave equipment market share lead in 4Q11, though leader Ericsson (Stockholm, Sweden) maintained its top position for annual revenue for the third consecutive year in 2011.
“In 4Q11, Huawei had 20%, ahead of Ericsson (17%) and NEC (15%); Huawei had a notable ramp in revenue for this quarter compared to the previous quarter – it seems likely that some microwave revenues from 3Q11 were deferred to 4Q, giving Huawei a bump upwards; at the same time both Ericsson and NEC shipped a little less in 4Q, which enabled Huawei to leapfrog them both,” says Richard Webb, directing analyst for microwave at Infonetics Research.
Although, Webb thinks this is a one-off event and expects to see Ericsson and NEC back in the top two positions for the first quarter of 2012.
“That said, Huawei has steadily become a stronger player in the microwave space, winning business often as a second option vendor in a mobile operator’s backhaul network, but also scoring wins in Central Asia, Africa and Latin America, as well as Europe,” says Webb. “It’s technology has improved but overall Ericsson and NEC have broader and deeper customer bases in microwave and remain ahead of the innovation curve, along with other specialists such as Ceragon and Aviat Network."
According to Webb, Ericsson lead the market with 22% of revenues, ahead of NEC (18%) and Huawei (16%) for 4Q11.
“I think the year as a whole is probably a more accurate reflection of the standings in the microwave market – 4Q11 was not typical in this sense,” says Webb.
Overall, the microwave equipment market grew 4% in 4Q11 over 3Q11, to $1.35 billion worldwide. For the full year 2011, the microwave equipment market is down 6% to $5.3 billion--even as unit shipments have increased--dragged by rapidly declining TDM equipment sales and price erosion in the hybrid TDM/Ethernet segment, says Infonetics.
Meanwhile, sales of all-packet Ethernet microwave gear are up 19% for the year, and up 13% from the year-ago 4th quarter. Infonetics forecasts Ethernet -only microwave equipment to grow nearly 5-fold from 2011 to 2016. The global microwave equipment market (including TDM, hybrid, and Ethernet-only equipment) is forecast to total $5.6 billion in 2016.
“Although the microwave equipment market ended down a bit in 2011 compared to the previous year, the market is poised to return to growth as LTE backhaul needs accelerate, particularly Ethernet microwave gear,” says Webb. “Meanwhile, the millimeter wave equipment space was characterized in 2011 by ‘the Clearwire effect’ as Clearwire shifted from their nationwide WiMAX rollout in the US--for which they heavily invested in millimeter wave in 2010 for short-distance backhaul--to prepare for a transition to LTE .”
According to Webb, although this resulted in a large decline for the millimeter wave market in 2011, Infonetics forecasts a 63% compound annual growth rate for this emerging market from 2011 to 2016.
“The market will be driven by wider availability of licensed and unlicensed millimeter wave products and as demand for high capacity mobile backhaul solutions for metro areas with high cell density--and small cells in particular--increases with the deployment of 4G networks,” says Webb.
The global millimeter wave equipment market hit $45 million in 2011, and despite the overall dip in the market, sales of E Band 60GHz unlicensed spectrum millimeter wave equipment for mobile backhaul networks grew almost 80%.
According to Infonetics, the percent of total millimeter wave equipment revenue coming from mobile backhaul applications grew from 20% in 2009 to 59% in 2011.
BridgeWave leads both the 60GHz unlicensed and 70-90GHz licensed millimeter wave equipment segments, although Infonetics expects the vendor market share landscape to change significantly over the coming 12 to 18 months.