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The Asia-Pacific (AP) optical networking (ON) market will reach revenues of US$6.4 billion by 2016, as the sector’s overheated market goes through a cooling down period, predicts Ovum in a new forecast.

The analyst warns that although the AP market will grow at a compound annual growth rate (CAGR) of 4% from 2010 to 2016, much less than the astonishing 25% CAGR achieved from 2005 to 2010.

Ovum’s figures show that the market in Asia-Pacific contracted by 2.2% last year and will contract by a further 3.2% in 2011, “although for different reasons,” says Ian Redpath, Principal Analyst, “The 2010 reduction was due to a dry market in Japan and a government-induced freeze in India, while the Chinese market grew. For 2011, we predict growth again from Japan and India but a slowdown in China, caused by an overheated market that needs a little cooling-down period.”

According to Ovum,  China will not cede its place as the second highest contributing country to the global ON market, however the country’s contribution will not likely grow in 2011. At this point, no other countries are candidates to replace China and its rapid growth. The US and the northern European countries collectively are expected to exhibit steady, respectable growth in 2011. The return of extraordinary growth will most likely come from China when another build cycle comes around, for example  4G wireless, very-high-speed data to the enterprise, or another new service driver.

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