Forecast Update: Optical Components
Introduction
OC posted stong growth in 2010, but it is ahead of ON. We argue this difference is due to the different levels of the food chain and further argue that the difference will be corrected in 2011 by expansion of ON. Our outlook is for continued strong growth through 2015. Demand is for higher transmission rates in all segments of the market and for ROADMs in DWDM networks.
Features and benefits
Demand for higher-data-rate components continues to drive growth. 40Gbps is going mainstream in DWDM networks. Strong desire for 100Gbps today presents good revenues in 2015. 16Gbps Fibre Channel pushes up SAN while 10Gbps drives Ethernet to a new level. GPON is taking off in FTTx. ROADMs are in demand worldwide in metro and long haul.
Your key questions answered
OC posted stong growth in 2010, but it is ahead of ON. We argue this difference is due to the different levels of the food chain and further argue that the difference will be corrected in 2011 by expansion of ON. Our outlook is for continued strong growth through 2015. Demand is for higher transmission rates in all segments of the market and for ROADMs in DWDM networks.
Features and benefits
- Overall revenue outlook of OC is analyzed. The fastest growing market segments and the fast growing product segments are reveiwed.
- WAN, datacom, and access (FTTx and CATV optics) OC are forecasted through 2015. Price and volumes are included.
- A new methodology is used where OC market share and forecast are aligned.
Demand for higher-data-rate components continues to drive growth. 40Gbps is going mainstream in DWDM networks. Strong desire for 100Gbps today presents good revenues in 2015. 16Gbps Fibre Channel pushes up SAN while 10Gbps drives Ethernet to a new level. GPON is taking off in FTTx. ROADMs are in demand worldwide in metro and long haul.
Your key questions answered
- Why is OC growing faster than ON? Will OC crash due to inventory in 2011?
- What is the outlook for OC growth past 2011?
- Does WAN continue to be the strongest OC segment?
SUMMARY
In a nutshell
Ovum view
Simply inventory replenishment or new round of network buildouts? The answer will come in 2011
Key messages
FORECAST SUMMARY
OC to reach $10.5bn by 2015
Forecast revenue boost and its alignment to market share
Market segment impact due to market share alignment
RESULTS FOR 3Q10
3Q10 UP 25% FROM RECESSION BOTTOM
Market led by medium transmission products
ROADMs and short-distance transmission gain share
LONG-RANGE MARKET FORECAST DRIVERS AND BARRIERS
Ever-higher bandwidth needs will outweigh barriers to growth in the long run
The economic recovery is proceeding but downside risks remain elevated
Enterprise demand
Consumer demand
Carrier revenues are projected to improve but carriers will spend cautiously
Perchance to dream of a higher position in the telecom food chain
The optical networks system market is poised for a turn-around
The service provider switching and routing system market update
The CATV and FTTx access system market update
MARKET SEGMENT FORECAST
WAN continues to lead and is projected to increase its share
DWDM modules, led by ROADMs, have the highest WAN revenues and will out-perform other segments
DWDM interface modules also driving WAN market
Modulation format to be shared at 40Gbps
Ethernet and Fibre Channel transitions driving datacom market
Fibre Channel transition
Ethernet transition
Surprisingly strong growth of GPON in access market
PRODUCT SEGMENT FORECAST
Transmission growing faster than transport
Long transmission and discrete transmission driving market
MARKET SCENARIOS AND WARNING SIGNS
Watch ON growth as bellwether for OC throughout the year
APPENDIX
Methodology
Further reading
Definitions
Product segment mapped to market segment
Produce segment definitions
Author
Ovum Consulting
Disclaimer
In a nutshell
Ovum view
Simply inventory replenishment or new round of network buildouts? The answer will come in 2011
Key messages
FORECAST SUMMARY
OC to reach $10.5bn by 2015
Forecast revenue boost and its alignment to market share
Market segment impact due to market share alignment
RESULTS FOR 3Q10
3Q10 UP 25% FROM RECESSION BOTTOM
Market led by medium transmission products
ROADMs and short-distance transmission gain share
LONG-RANGE MARKET FORECAST DRIVERS AND BARRIERS
Ever-higher bandwidth needs will outweigh barriers to growth in the long run
The economic recovery is proceeding but downside risks remain elevated
Enterprise demand
Consumer demand
Carrier revenues are projected to improve but carriers will spend cautiously
Perchance to dream of a higher position in the telecom food chain
The optical networks system market is poised for a turn-around
The service provider switching and routing system market update
The CATV and FTTx access system market update
MARKET SEGMENT FORECAST
WAN continues to lead and is projected to increase its share
DWDM modules, led by ROADMs, have the highest WAN revenues and will out-perform other segments
DWDM interface modules also driving WAN market
Modulation format to be shared at 40Gbps
Ethernet and Fibre Channel transitions driving datacom market
Fibre Channel transition
Ethernet transition
Surprisingly strong growth of GPON in access market
PRODUCT SEGMENT FORECAST
Transmission growing faster than transport
Long transmission and discrete transmission driving market
MARKET SCENARIOS AND WARNING SIGNS
Watch ON growth as bellwether for OC throughout the year
APPENDIX
Methodology
Further reading
Definitions
Product segment mapped to market segment
Produce segment definitions
Author
Ovum Consulting
Disclaimer
