Ongoing shift to enterprise seen lifting components above $1.5B

The market for optical and electronic transmission components will grow from just over $1 billion in 2003 to $1.6 billion in 2008, according to two new reports from industry analyst CIR (Charlottesville, VA).

CIR's first report, "Optical Transmission Components Forecasts and Market Share Analysis," reveals that opportunities in the optical-networking business are shifting from the public network to the enterprise. For example, worldwide sales of lasers, detectors, and other components for Ethernet and Fibre Channel—both primarily enterprise protocols—will be worth almost seven times that of SONET/SDH components, which are used mostly for public-network equipment.

Unlike service providers, whose networks are the source of their revenue, enterprise customers tend to view their networks as cost centers. Therefore, the market for enterprise equipment and the components that go into them is especially price-sensitive.

In its second report, "Electronic Transmission Components Forecasts and Market Share Analysis," CIR finds that Ethernet and Fibre Channel comprise more than 90% of the market. And while there is always room for cost improvements in manufacturing and supply-chain management, CIR believes the biggest rewards will go to those who can successfully evolve from making only Layer 1 and Layer 2 products to making products that embody the higher-layer protocols that network managers will rely on as they re-architect their networks for the latest security, mobility, and voice over IP applications. According to CIR, future products with potential will include PHY/MAC combos that also support the latest encryption protocols.

For more details on the two reports, visit www.cir-inc.com.

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