CIR expects U.S. optical access market to top $3 billion in 2007

14 April 2003 Charlottesville, VA Lightwave -- The optical access market will grow from $2.1 billion in 2003 to just over $3 billion in 2007, driven mainly by growth in Ethernet, coarse wavelength-division multiplexing, passive optical networks, and free-space optics, according to a new report by Communications Industry Researchers (CIR).

Apr 14th, 2003

14 April 2003 Charlottesville, VA Lightwave-- The optical access market will grow from $2.1 billion in 2003 to just over $3 billion in 2007, driven mainly by growth in Ethernet, coarse wavelength-division multiplexing (CWDM), passive optical networks, and free-space optics, according to a new report by Communications Industry Researchers (CIR).

The act of funding new technology by itself is not the answer, according to CIR's research. When considering how cheap old technology, like Ethernet, has become it is not the result of design or listening carefully to customer requirements. It is a product of time and patience. The 30-plus year history of that technology has allowed the creation of tremendous production volumes, which are the leading cause for Ethernet's low unit costs. Patience will allow time for the opportunity to generate volume, and in turn, to reduce unit costs for free-space optics, 802.11, and other promising technologies. New requirements, like security, can then be layered above without destroying the volume efficiencies.

CIR goes on to note that there is not, nor will there be a single startup or unique technology that will provide 1999-style returns. However, one issue is clear: no service provider, large or small, can match the production scale and technology cost reductions a vendor achieves from selling to thousands of corporations. Ethernet and CWDM are examples of this, and also the reason why free-space optics startup Terabeam is now selling equipment directly to business customers. CIR notes that if AT&T implements free-space optics, or some other access technology, there is certain to be a flood of press releases, news stories, and analyst quotes. However, the firm contends, it is the decisions of chief technology officers and information technology managers at thousands of universities, hospitals, and brokerages that are the real determining factor for any new technology's success.

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