New CIR Report Says U.S. DWDM Sub-Systems Market to Reach $3.7 Billion By 2005, but Says That Component Marketing Should Stress Cost Savings Over Hype

Apr 25, 2001, 01:00 ET from Communications Industry Researchers, Inc.

    CHARLOTTESVILLE, Va., April 25 /PRNewswire/ -- The slowing of the economy
 will require that Dense Wave Division Multiplexing (DWDM) components
 manufacturers recast their strategies to reflect the cost saving aspects of
 their products rather than invent new bandwidth boosting technologies,
 according to a new report from Communications Industry Researchers, Inc.,
 (CIR) an optical industry market research firm based here.  However, despite
 harder times and the realization that five-fold growth will not happen as soon
 as some analysts may claim, CIR expects the U.S market for DWDM sub-systems --
 excluding amplifiers -- to grow from $855 million in 2001 to $3.67 billion in
 2005 (See chart below.)  These figures, as well as the analysis in the report,
 are based on interviews with the ultimate consumers of DWDM components and
 sub-systems equipment vendors who purchase components and not just interviews
 with components/sub-systems manufacturers.
     The new report, DWDM SUB-SYSTEMS AND COMPONENTS: MARKETS AND TRENDS,
 claims that in more bullish times, DWDM components and sub-systems could be
 marketed to equipment vendors on promises of the extra bandwidth which lead
 components and sub-systems manufacturers to focus on exotic technologies that
 could push data rates achieved on fiber closer to their theoretical limits.
 Examples of such technologies include the use of bandwidth outside of the C-
 band, utilization of exotic materials to pump data rates up to 40 Gbps and
 beyond, and some advanced amplifier technology.
     However, in today's cost sensitive marketplace, DWDM components
 manufacturers would be better advised to promote cost savings instead of
 bandwidth boosts -- more bucks less bang!  And, the new CIR report says that
 this economic necessity will be additionally reinforced by the growing focus
 of the DWDM business towards the metro and access segments -- which are cost
 sensitive in both the good times and the bad.
 
     Changes Needed in Marketing, Technology and Service
     According to the new CIR report, the strategic change that the new
 marketplace circumstances will force on DWDM components and sub-systems
 manufacturers will have implications for both marketing and technology
 planners.  On the marketing side, tighter markets will require more aggressive
 marketing and CIR cites Hitachi Cable and Excelight as examples of companies
 needing to improve upon their message.  CIR also notes that JDS Uniphase,
 although the dominant player in this space, received poor marks for customer
 service from many of the equipment vendors to which it sells.  But, CIR says
 that the most successful marketers will be those whose story resembles, "We
 can reduce the cost of your systems," rather than "We can make you go faster."
     DWDM SUB-SYSTEMS AND COMPONENTS: MARKETS AND TRENDS claims that DWDM
 components and sub-systems manufacturers will be able to reinforce this
 message as they make evolutionary improvements in two potentially disruptive
 technologies:  tunable lasers and photonic integration.  In both cases, these
 technologies appear to open up a long term and successful pathway to the all-
 optical network, but CIR believes that the current implications of these
 technologies are less dramatic, but nonetheless just as important.
     CIR sees the immediate selling feature for tunable lasers as their ability
 to cut inventory costs at the equipment manufacturers' plant and at the
 central office.  In the longer term, applications for tunable lasers could
 include optical packet switches and remote tunability.  The problem is that
 most equipment manufacturers are still shying away from the use of tunable
 lasers because of worries about their long-term reliability.  CIR suggests
 that, in the current economic climate, tunable laser manufacturers should
 focus on the reliability issue more than futuristic techniques and says that
 companies that have been especially impressive in this regard are Nortel
 Optical Components, Agere Systems, New Focus, ADC, Agility, Corning and JDS
 Uniphase.
     Photonic integration is another area that may ultimately lead to optical
 wonders, but where CIR says the immediate focus should be on achieving short
 term cost savings, rather than on long-term potential.  Components and sub-
 systems manufacturers will find it easier -- and will be able to generate more
 short-term revenues -- with a message of reduced product size through the
 integration of wavelength lockers and semiconductor optical attenuators into
 lasers than with stories about monolithically integrated active and passive
 optical circuits.  And, while almost all DWDM components and sub-systems
 vendors are beginning to utilize optical integration techniques, CIR holds out
 special praise for Nortel, Alcatel Optronics, Marconi Optical Components,
 Corning, Zenastra and JDS Uniphase because of their concentration on step-by-
 step integration of components so as to incrementally reduce cost.  Similarly,
 CIR's report claims that there is more to be gained by delivering tighter
 channel spacing in the C-band, as is being done by Ciena (which makes its own
 fiber Bragg gratings to incorporate in its systems), Alcatel Optronics,
 Fujitsu, JDS Uniphase and Oplink rather than trying to push the envelope with
 S-band and L-band, which may be useful in the long run, but have yet to be
 standardized by the ITU-T.
 
     About the Report
     DWDM SUB-SYSTEMS AND COMPONENTS: MARKETS AND TRENDS covers the markets for
 both DWDM components (light sources, detectors, filters/gratings, modulators,
 isolators, detectors and wavelength lockers) and DWDM sub-systems
 (transmitters, receivers, MUXs/DEMUXs, dispersion compensators.)  This new
 report also discusses amplifiers, but given the importance of the technology,
 CIR will be bringing out a special report on the amplifier market later in
 2001.  The report includes profiles and strategic assessments of approximately
 30 manufacturers of DWDM sub-systems and components, along with case studies
 and analyses of the DWDM component/sub-system requirements of close to 20
 leading equipment vendors.  In addition, this new CIR report includes five-
 year forecasts of DWDM components and sub-systems broken down by product type
 and application.  Finally, the report contains a detailed assessment of the
 short- and long-term evolution of DWDM technology.
     CIR's new report is available to interested buyers at a cost of $4,500 for
 hard copy and may also be purchased in electronic formats.  For additional
 information about the report including a table of contents and ordering
 information, please visit CIR's web site at http://www.cir-inc.com or contact
 Robert Nolan at CIR's main office at 804-984-0245 ext. 15 or
 robert.nolan@cir-inc.com.  Members of the accredited trade press may receive a
 full Executive Summary as well as schedule interviews with the analysts of
 this report by contacting Lisa Rogers at 804-984-0245 ext. 13 or
 lisa.rogers@cir-inc.com.
 
     CIR is a leading industry analyst firm specializing in the areas of fiber
 optic networking systems, software and components. Through its reports, market
 advisory services and custom client engagements, CIR provides insightful
 research, analysis and consulting services for the optical market.  CIR relies
 upon Service Provider activities and "demand side" research as the basis for
 its opinions and forecasts so as to provide realistic and credible analysis
 and insights for both its clients and the industry at large.
 
                     U.S. DWDM Sub-systems Market ($ Millions)
 
                                             2001              2005
     Transmitters                            536              2,136
     Receivers                               161                641
     Transponders                             14                 33
     MUX/DEMUX                                97                423
     Dispersion Compensators                  47                440
     TOTAL                                   855              3,673
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X50075876
 
 

SOURCE Communications Industry Researchers, Inc.
    CHARLOTTESVILLE, Va., April 25 /PRNewswire/ -- The slowing of the economy
 will require that Dense Wave Division Multiplexing (DWDM) components
 manufacturers recast their strategies to reflect the cost saving aspects of
 their products rather than invent new bandwidth boosting technologies,
 according to a new report from Communications Industry Researchers, Inc.,
 (CIR) an optical industry market research firm based here.  However, despite
 harder times and the realization that five-fold growth will not happen as soon
 as some analysts may claim, CIR expects the U.S market for DWDM sub-systems --
 excluding amplifiers -- to grow from $855 million in 2001 to $3.67 billion in
 2005 (See chart below.)  These figures, as well as the analysis in the report,
 are based on interviews with the ultimate consumers of DWDM components and
 sub-systems equipment vendors who purchase components and not just interviews
 with components/sub-systems manufacturers.
     The new report, DWDM SUB-SYSTEMS AND COMPONENTS: MARKETS AND TRENDS,
 claims that in more bullish times, DWDM components and sub-systems could be
 marketed to equipment vendors on promises of the extra bandwidth which lead
 components and sub-systems manufacturers to focus on exotic technologies that
 could push data rates achieved on fiber closer to their theoretical limits.
 Examples of such technologies include the use of bandwidth outside of the C-
 band, utilization of exotic materials to pump data rates up to 40 Gbps and
 beyond, and some advanced amplifier technology.
     However, in today's cost sensitive marketplace, DWDM components
 manufacturers would be better advised to promote cost savings instead of
 bandwidth boosts -- more bucks less bang!  And, the new CIR report says that
 this economic necessity will be additionally reinforced by the growing focus
 of the DWDM business towards the metro and access segments -- which are cost
 sensitive in both the good times and the bad.
 
     Changes Needed in Marketing, Technology and Service
     According to the new CIR report, the strategic change that the new
 marketplace circumstances will force on DWDM components and sub-systems
 manufacturers will have implications for both marketing and technology
 planners.  On the marketing side, tighter markets will require more aggressive
 marketing and CIR cites Hitachi Cable and Excelight as examples of companies
 needing to improve upon their message.  CIR also notes that JDS Uniphase,
 although the dominant player in this space, received poor marks for customer
 service from many of the equipment vendors to which it sells.  But, CIR says
 that the most successful marketers will be those whose story resembles, "We
 can reduce the cost of your systems," rather than "We can make you go faster."
     DWDM SUB-SYSTEMS AND COMPONENTS: MARKETS AND TRENDS claims that DWDM
 components and sub-systems manufacturers will be able to reinforce this
 message as they make evolutionary improvements in two potentially disruptive
 technologies:  tunable lasers and photonic integration.  In both cases, these
 technologies appear to open up a long term and successful pathway to the all-
 optical network, but CIR believes that the current implications of these
 technologies are less dramatic, but nonetheless just as important.
     CIR sees the immediate selling feature for tunable lasers as their ability
 to cut inventory costs at the equipment manufacturers' plant and at the
 central office.  In the longer term, applications for tunable lasers could
 include optical packet switches and remote tunability.  The problem is that
 most equipment manufacturers are still shying away from the use of tunable
 lasers because of worries about their long-term reliability.  CIR suggests
 that, in the current economic climate, tunable laser manufacturers should
 focus on the reliability issue more than futuristic techniques and says that
 companies that have been especially impressive in this regard are Nortel
 Optical Components, Agere Systems, New Focus, ADC, Agility, Corning and JDS
 Uniphase.
     Photonic integration is another area that may ultimately lead to optical
 wonders, but where CIR says the immediate focus should be on achieving short
 term cost savings, rather than on long-term potential.  Components and sub-
 systems manufacturers will find it easier -- and will be able to generate more
 short-term revenues -- with a message of reduced product size through the
 integration of wavelength lockers and semiconductor optical attenuators into
 lasers than with stories about monolithically integrated active and passive
 optical circuits.  And, while almost all DWDM components and sub-systems
 vendors are beginning to utilize optical integration techniques, CIR holds out
 special praise for Nortel, Alcatel Optronics, Marconi Optical Components,
 Corning, Zenastra and JDS Uniphase because of their concentration on step-by-
 step integration of components so as to incrementally reduce cost.  Similarly,
 CIR's report claims that there is more to be gained by delivering tighter
 channel spacing in the C-band, as is being done by Ciena (which makes its own
 fiber Bragg gratings to incorporate in its systems), Alcatel Optronics,
 Fujitsu, JDS Uniphase and Oplink rather than trying to push the envelope with
 S-band and L-band, which may be useful in the long run, but have yet to be
 standardized by the ITU-T.
 
     About the Report
     DWDM SUB-SYSTEMS AND COMPONENTS: MARKETS AND TRENDS covers the markets for
 both DWDM components (light sources, detectors, filters/gratings, modulators,
 isolators, detectors and wavelength lockers) and DWDM sub-systems
 (transmitters, receivers, MUXs/DEMUXs, dispersion compensators.)  This new
 report also discusses amplifiers, but given the importance of the technology,
 CIR will be bringing out a special report on the amplifier market later in
 2001.  The report includes profiles and strategic assessments of approximately
 30 manufacturers of DWDM sub-systems and components, along with case studies
 and analyses of the DWDM component/sub-system requirements of close to 20
 leading equipment vendors.  In addition, this new CIR report includes five-
 year forecasts of DWDM components and sub-systems broken down by product type
 and application.  Finally, the report contains a detailed assessment of the
 short- and long-term evolution of DWDM technology.
     CIR's new report is available to interested buyers at a cost of $4,500 for
 hard copy and may also be purchased in electronic formats.  For additional
 information about the report including a table of contents and ordering
 information, please visit CIR's web site at http://www.cir-inc.com or contact
 Robert Nolan at CIR's main office at 804-984-0245 ext. 15 or
 robert.nolan@cir-inc.com.  Members of the accredited trade press may receive a
 full Executive Summary as well as schedule interviews with the analysts of
 this report by contacting Lisa Rogers at 804-984-0245 ext. 13 or
 lisa.rogers@cir-inc.com.
 
     CIR is a leading industry analyst firm specializing in the areas of fiber
 optic networking systems, software and components. Through its reports, market
 advisory services and custom client engagements, CIR provides insightful
 research, analysis and consulting services for the optical market.  CIR relies
 upon Service Provider activities and "demand side" research as the basis for
 its opinions and forecasts so as to provide realistic and credible analysis
 and insights for both its clients and the industry at large.
 
                     U.S. DWDM Sub-systems Market ($ Millions)
 
                                             2001              2005
     Transmitters                            536              2,136
     Receivers                               161                641
     Transponders                             14                 33
     MUX/DEMUX                                97                423
     Dispersion Compensators                  47                440
     TOTAL                                   855              3,673
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X50075876
 
 SOURCE  Communications Industry Researchers, Inc.