Faced with unprecedented and accelerating bandwidth demand, network operators must find lower-cost approaches to transport traffic. Innovations in optical components are potential game changers in terms of operating costs, but new technologies must be implemented cautiously as a poor choice can be disastrous to the infrastructure.
Ovum’s research analyzes component-level approaches to lowering the cost of transport. For example, coherent receivers are gearing up to become a mainstream technology in the wide area network (WAN), 10G transceivers are ramping in datacom networks, optics are migrating into wireline access networks, and new radio access network (RAN) architectures are being evaluated by wireless operators. Our research examines the risks and promise of new component technologies and monitors the supplier and competitive landscape. It also analyzes commercialization of the technologies, vendors’ financial performance, and the long-term viability of the approaches.
- Optical components forecast: transceiver revenue distribution in 2012 by data rate and market segment leading the demand
Signature Research
Optical Components quarterly market share report
Optical components are an innovation engine that supports and enables low-cost transport throughout the network. OC revenue is also a leading indicator for new network infrastructure build-outs. Ovum’s quarterly OC market share report is a bellwether for this market, analyzing revenues by supplier, technology, and product segment. It tracks new product development and highlights evolving market conditions. It also compares how the market is performing versus our forecast.
Key Themes
Optical components after the inventory correction
Optical component companies are posting profitable results, but the 2011 growth was considerably weaker than 2010 due to an inventory correction and softening demand. Market capitalizations have decreased significantly as a result. Suppliers are concerned that weak demand will persist long term. And they are being asked to invest in new technologies to support decreasing the cost of the burgeoning demand of bandwidth on the operator’s network.
What are the real opportunities? Where should component suppliers invest? What’s the long- term outlook? What is the component competitive landscape? Which technologies are best suited for this market? Ovum’s quarterly market share and its forecasts provide a comprehensive market perspective to help understand and identify the real opportunities. Ovum’s technology reports review the emerging opportunities, potential suppliers, and their technologies.
Managing today’s 10G while preparing for tomorrow’s 40 and 100G
The next-generation transmission rate is 100Gbps, but the development cycle is likely to be slow due to the technical challenges involved. Ramping these products in manufacturing will be monitored carefully since demand is larger than supply, making availability of components for 100Gbps a key issue. Meanwhile multi-year revenue opportunities exist at both 10 and 40Gbps. Ovum’s research offers market data and intelligence to help suppliers, customers, and operators understand the market realities.
Interoffice connections (distances from hundreds of meters to 40km) also demand high-bandwidth transmission. Our research tracks the progress of 40 and 100Gbps transceivers and technologies for these distances.
Meanwhile 10G is far from dead: it still accounts for the largest fraction of transceiver revenues, and new products are still being introduced into the market. Our analyses include the tunable XFP transceiver, the DWDM SFP+, and the advent of 10G in the access network.
Component needs for next-generation fixed and mobile access
Operators are trying to grow access revenues while decreasing costs as bandwidth demand explodes. Our research analyzes cost- reduction strategies on wireline and wireless networks and the components needed to support these approaches. DSL is used as the benchmark for the wireline assessment. Our research examines the cost of providing additional bandwidth to subscribers and enabling more subscribers to share a network.
The research also examines components and related costs associated with emerging radio access network (RAN) architectures. What is needed to provide these new architectures? What new components are required? What are the estimated costs? What is the component supply chain and competitive landscape? What’s the level of difficulty to implement the technologies?
