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Component Shortages Stifle 1Q14 RAN Revenues in Spite of China LTE Rollout, Says ABI Research

For the first quarter of 2014 vendors reported revenue affected by certain component shortages which are forecast to lift towards the end of the second quarter or the beginning of the third quarter this year.

The net effect was that 1Q14, in spite of the large TD-LTE spend in China, turned out much the same as 1Q13 with a double-digit quarterly decline in revenue reported – a value which lags average seasonality over the last five Q1 periods.

Ericsson’s RAN revenue, according to ABI Research’s estimates, while the largest among the vendors tracked, saw the highest sequential decline. The company stated that it was anticipating a decline in its mobile broadband coverage projects in North America and Japan which were not fully offset by growth in China.

Nokia’s (formerly NSN) Networks segment net sales were adversely affected by component shortages which the company expects to continue to impact their business at least through the end of 2Q14. Networks sales in Asia-Pacific declined from the heights of the LTE investment cycle in 1Q13. In addition the company noted excellent LTE momentum in Greater China due to the new TD-LTE network roll-outs and has said that Networks is on track to become the leading foreign vendor in the country.

Alcatel-Lucent reported Wireless Access division revenue growing year-on-year and noted that LTE revenue growth continued to be strong particularly in the United States. LTE growth was partially offset by continued declines in 2G and 3G which fell for the first time to less than 25% of revenue.

“Alcatel-Lucent and Nokia both reported an impact from component shortages that we believe were across the board affecting all vendors,” says Nick Marshall research director at ABI Research.

“We also expect that the same component shortages impacted the Chinese vendors, but given their share position in the massive TD-LTE rollout they should have seen normal seasonality for the quarter,” continues Marshall.

Vendor revenues and market shares are tracked by ABI Research’s “Mobile Infrastructure RAN Market Shares” Market Data that tracks base station deployments by technology, region, and country. The data also includes forecasts for new deployments and upgrades annually through 2019, as well as base station spend estimates.

These findings are part of ABI Research’s Macro Basestations Market Research (https://www.abiresearch.com/market-research/service/macro-basestations/).

ABI Research provides in-depth analysis and quantitative forecasting of trends in global connectivity and other emerging technologies. From offices in North America, Europe and Asia, ABI Research’s worldwide team of experts advises thousands of decision makers through 70+ research and advisory services. Est. 1990. For more information visit www.abiresearch.com, or call +1.516.624.2500.

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