Global 40/100G market update: 2H09
While 40G revenues for ON systems line cards are still fairly modest compared with 10G, the number of operators deploying the technology are too many to list. Globally, network operators have spent nearly $391 million in the 4Q period ending 2Q09 deploying the technology. The rapid price decline of 10G along with decreased spending resulting from poor economic conditions are constraining demand. Router-interconnect remains the largest application but 4x10G muxponding is growing, especially for undersea applications. Ovum expects 40/100G market volume to grow 79% annually through 2014. Nokia Siemens continues to lead the market in port deployments but Nortel, Huawei, and Cisco have closed the gap. 100G is right around the corner and we will see the first revenue-generating deployments beginning in 2010.
Executive summary
In a nutshell
Ovum view
40G deployments are widespread; 100G market developing quickly
40G is a necessary stepping stone to 100G
40G deployments are slowing in 2H09, casting shadow on forecast
What we count and what we don’t
100G graduates to the next phase; deployments will take a couple of years
40G market segment analysis
Major market developments
North America leads deployments to date
China deployments are growing rapidly
Nokia Siemens leads 1H09 global 40G market, which rose 56% over 2H08
Out with the old, in with the new (modulation format)
Interconnection between core routers is still the largest application; use for undersea upgrades is increasing
40G for subsea applications
Economic slowdown curtailing 40G spending in 2H09; industry hype is now focused on 100G
Overall market health (or lack of health) can drastically affect the pace of innovation and deployments
The path to 100G is paved with 40G
40G is an important stepping stone but 100G is the ultimate goal
100G decisions will impact 40G also
From hero experiments to field trials
Providing a 40G-to-100G upgrade path is critical for success
Adoption of 100G is still years away
Datacom is the volume market for 100GE and 40GE
Components can be a critical path
First to market doesn’t guarantee market leadership; volume does
In a nutshell
Ovum view
40G deployments are widespread; 100G market developing quickly
40G is a necessary stepping stone to 100G
40G deployments are slowing in 2H09, casting shadow on forecast
What we count and what we don’t
100G graduates to the next phase; deployments will take a couple of years
40G market segment analysis
Major market developments
North America leads deployments to date
China deployments are growing rapidly
Nokia Siemens leads 1H09 global 40G market, which rose 56% over 2H08
Out with the old, in with the new (modulation format)
Interconnection between core routers is still the largest application; use for undersea upgrades is increasing
40G for subsea applications
Economic slowdown curtailing 40G spending in 2H09; industry hype is now focused on 100G
Overall market health (or lack of health) can drastically affect the pace of innovation and deployments
The path to 100G is paved with 40G
40G is an important stepping stone but 100G is the ultimate goal
100G decisions will impact 40G also
From hero experiments to field trials
Providing a 40G-to-100G upgrade path is critical for success
Adoption of 100G is still years away
Datacom is the volume market for 100GE and 40GE
Components can be a critical path
First to market doesn’t guarantee market leadership; volume does
LIST OF TABLES
Table 1: 40G capabilities by vendor
Table 2: Pros and cons of the most popular 40G modulation formats
Table 1: 40G capabilities by vendor
Table 2: Pros and cons of the most popular 40G modulation formats
LIST OF FIGURES
Figure 1: Annualized global 40G line card spending, 3Q08–2Q09
Figure 2: Global 40G market share (rolling 4 quarters), 2Q09
Figure 3: Global 40G line card unit shipments, 3Q08–2Q09
Figure 4: 40G deployments by modulation format type (rolling 4 quarters), 2Q09
Figure 5: Global 40G optical networking market unit forecast, 2006–14
Figure 6: DWDM line card revenues, 2006–14
Figure 7: Comparison of Ovum’s earlier 40/100G forecast, May 2009 vs. November 2009
Figure 8: Field trials of 100G technology
Figure 1: Annualized global 40G line card spending, 3Q08–2Q09
Figure 2: Global 40G market share (rolling 4 quarters), 2Q09
Figure 3: Global 40G line card unit shipments, 3Q08–2Q09
Figure 4: 40G deployments by modulation format type (rolling 4 quarters), 2Q09
Figure 5: Global 40G optical networking market unit forecast, 2006–14
Figure 6: DWDM line card revenues, 2006–14
Figure 7: Comparison of Ovum’s earlier 40/100G forecast, May 2009 vs. November 2009
Figure 8: Field trials of 100G technology
