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Millimeter wave gear forecast to grow at 63% CAGR; Ethernet microwave growing 5-fold by 2016

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Huawei stole the microwave equipment market share lead in 4Q11, though leader Ericsson maintained its top position for annual revenue for the third consecutive year in 2011, according to a report by Infonetics Research.

The report also said that the overall 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.

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.

"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," expects Richard Webb, directing analyst for microwave at Infonetics Research.

Webb adds: "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. Though this resulted in a steep decline in the millimeter wave market in 2011, Infonetics remain bullish on this emerging market, forecasting a 63% compound annual growth rate for millimeter wave equipment revenue 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."

The global microwave equipment market (including TDM, hybrid, and Ethernet-only equipment) is forecast by Infonetics to total $5.6 billion in 2016.

As the proportion of small cells increases in 3G and 4G networks, microwave likely will establish itself as the primary backhaul solution for outdoor small cells, driving continued microwave unit shipment growth.

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Tags: ericsson  huawei  microwave  ethernet