In its latest report on the ON market, Ovum says that given the performance in the first half of the 2012 financial year, global growth over 2011 will be unlikely without a “very big bang” in the fourth quarter.
Ovum says the ON market “continues to disappoint” and that that some vendors are “taking advantage of growth pockets better than others.”
According to Dana Cooperson, Vice President and Practice Leader of Network Infrastructure at Ovum, “preliminary analysis of 2Q12 offers more reasons for concern,” with global spending in the quarter dropping eight percent compared with 2Q11 to US$3.8billion.
“It will be very challenging to make the 2 percent growth we’ve predicted for the year, although as Asia-Pacific and SCA become a larger part of the global market, spending is shifting strongly to the fourth quarter.”
Ovum says that the ON market will need a big 4Q12 to boost 2012 spending, but Cooperson points out that, as third quarter spending historically declines from 2Q, Ovum does not assume any improvements next quarter.
“With 1H12 behind us, we are trending toward our pessimistic scenarios in North America and EMEA. Despite good prospects in Asia-Pacific and SCA, this was not sufficient throughout the first half of the year to push the global market to growth.
“Prospects in the eurozone have not yet improved and are unlikely to turn around quickly. Prospects for North American tier-2 carriers are improving, but any growth in spending may not make up the gap for vendors that depend on spending by the largest carriers,” Cooperson cautions.
According to Cooperson, Ovum will advise its clients that two percent global growth prospects for 2012 look dim. “We are planning a forecast update by the end of the year to incorporate our new product segmentation; we will also update our most likely, optimistic, and pessimistic scenarios as needed.”