“In 4Q 2020, the market decline was attributed to several cases of inventory correction,” said Baron Fung, Research Director at Dell’Oro Group. “First, the market’s sequential decline was attributed to a large non-reoccuring purchase by Huawei in the prior quarter ahead of the US-imposed sanctions…
“While government spending is flowing into all vertical industries, it is most notable in K-12 Education and Government,” said Matthias Machowinski, Senior Research Director at Dell’Oro Group. “We estimate those two verticals alone contributed an additional 15 percent to overall market spend during 4Q 2020, as sales to K-12 increased 90 percent and Government increased almost 40 percent—extraordinary rates. Clearly, government spending is lifting overall market sales and by our judgment, is likely to continue through 2021 and beyond,” added Machowinski.
“Government stimulus around the world, which propelled market recovery in 3Q 2020, continued in the fourth quarter of 2020,” said Sameh Boujelbene, Senior Director at Dell’Oro Group. “However, 4Q 2020 did not benefit from pent-up demand from large enterprises as much as the prior quarter did. On a more positive note, we started to see some sign of recovery in the mid-market,” added Boujelbene.
“Between concerns on starting new optical builds during the start of the pandemic and aggressive plans on 5G deployments that required a larger share of a service provider’s capital budget, the spending on optical transport dramatically slowed by the end of 2020,” said Jimmy Yu, Vice President at Dell’Oro Group.
“The combination of pent-up demand caused by the COVID-19 pandemic and an acceleration away from legacy technologies created a surge in SD-WAN adoption during the fourth quarter,” said Shin Umeda, Vice President at Dell’Oro Group. “On a full-year basis, the market grew 32 percent in 2020, which was about half the rate of the prior year, but very impressive given the challenging macroeconomic environment that we faced throughout the year,” added Umeda.
“I see the RDOF as being impactful beginning in 2022,’’ explained Jeff Heynen, Vice-President of Broadband Access and Home Networking for the Dell’Oro Group, a market research and consultancy.