Fiber-optic connector shipments to soar as prices plummet

Fiber-optic connector shipments to soar as prices plummet

The volume of fiber-optic connectors sold from 1994 to 1999 is predicted to jump 150% at decreasing prices because numerous suppliers are competing in a restricted market

Based on market projections from 1993 through 1999, the U.S. fiber-optic connector market is expected to steadily increase in shipments and continually decrease in costs because of the demand for singlemode plugs in telecommunications and cable-TV applications and for multimode plugs in backbone systems and horizontal wiring.

Higher shipments of multimode plugs are forecast, however, because private network providers prefer them for short-distance links. Declining connector prices are partially the result of more efficient plug designs and joining techniques, but the underlying impetus for cheaper prices is competition--numerous suppliers struggling in a limited market.

Sales slated to rise

The volume of fiber-optic connectors sold in the United States is calculated to jump from 20 million plugs in 1994 to more than 50 million plugs in 1999--a 150% climb. During the same period, connector sales are anticipated to ascend 69% from $128 million in 1994 to $215 million in 1999.

In 1994, the fiber-optic connector market increased 14% over the $113 million achieved in 1993--but down from the 17% upswing attained from 1989 to 1993. During 1995, the connector market should rise 12%, to $144 million. This data refers only to the sales of connector plugs--the unmated male ends--and does not include sleeves or adapters.

The 1994 connector market grabbed approximately 72% of the $268 million market for interconnect hardware. Including cable assemblies, the interconnect market is forecast to grow to $472 million in 1999.

The multimode connector market is gauged to sprout at a compound annual growth rate of 14%, from $71 million in 1994 to $135 million in 1999. During the same time, the singlemode market should expand at a 7% growth rate, from $57 million in 1994 to $80 million in 1999.

According to Charles Xu, analyst at Kessler Marketing Intelligence in Newport, RI, the shipment of singlemode and multimode connectors is expected to grow at the same annual average rate of slightly more than 20% from 1994 throughout 1999, although they started from different bases. The key issue is connector cost, according to Xu. "Singlemode connectors, switching from biconic, D4 and FC types to the less-expensive SC type, are exhibiting a faster price-decreasing mode compared to multimode plugs. Consequently, there is a dramatic difference in the growth rate of multimode and singlemode connectors, with the multimode market outgrowing the singlemode market by an annual average rate of 7% from 1994 to 1999," he adds.

Rapid developments

The U.S. fiber-optic connector market is changing markedly because of rapid developments in product technology, shifting application patterns and tough competition. Vendors clash not only in supplying a variety of connector products, but also in reducing costs through design and material changes and installation improvements.

The market changes during the next few years, for example, are anticipated to be influenced by the manufacturing developments of the most expensive part of a fiber-optic connector--the plastic ferrule. Recently, connector suppliers turned to liquid crystal polymer ferrules as low-cost alternatives.

In 1993, more than 40 companies supplied fiber-optic connectors to the U.S. market. Of these, 20 companies supplied more than 95% of all multimode and singlemode connectors shipped. The leading suppliers are AMP Inc., AT&T Network Cable Systems, 3M Specialty Optical Fibers and Siecor Corp. Other top suppliers include Molex Fiber-optic Interconnect Technologies Inc., Methode Electronics Inc. and ADC Telecommunications Inc.

The 16.2 million-unit U.S. connector market formed 52% of the worldwide fiber-optic connector market in 1993. However, this percentage is predicted to drop to 39% in 1999, when the plug volume in the United States is expected to hit 51.1 million. This change should result because the U.S. market in terms of units should grow at a rate of 21% between these years, slightly lower than the world average of 27%.

By 1993, the U.S. market had an installed-base of 68.4 million multimode and singlemode connectors. The installed multimode plugs increased by 186%, from 18.2 million units in 1989 to 52.1 million units in 1993. The installed singlemode plugs increased by 265%, from 4.5 million units in 1989 to 16.3 million units in 1993.

The increase in singlemode plug installations coincides with the growing demand by regional telephone companies for telecommunications network connections. The telephone companies should continue to order high-volumes of connectors for new fiber-in-the-loop and hybrid fiber/coaxial-cable systems. Approximately 75 million singlemode connectors are forecast to be installed in the United States by 1999--360% more than the installed volume in 1993. The volume of multimode plugs installed should approach 200 million units in 1999, or 280% more than the installed volume in 1993.

Multimode sales should rise from $60.5 million in 1993 to $134.6 million in 1999, a 123% rise. Singlemode sales should rise 54% from $52.1 million in 1993 to $80.4 million in 1999. The annual growth rates from 1993 to 1999 are expected to be 14% for multimode and 7% for singlemode. In 1994, multimode sales should reach $70.9 million; singlemode sales, $57.4 million. u

This article was abstracted from the report: The U.S. Fiber-optic Connector Market: 1994-1999, produced by Kessler Marketing Intelligence in Newport, RI.