Over the shoulder

With the year winding down, it’s time once again to peek over our shoulders at the top three stories for 2012.

by Stephen Hardy

With the year winding down, it’s time once again to peek over our shoulders at the top three stories for 2012.

From an industry perspective, the most significant event was the merger of Oclaro and Opnext. The transaction vaulted the new Oclaro to the top of the optical-component/subsystem market share list. The merger further made the case that the landscape is shifting toward a handful of major suppliers as well. As next generation component-technology R&D becomes more difficult to fund and subsystems become more complex, companies will need a certain amount of “critical mass” in terms of both economic and intellectual resources if they want to maintain technological differentiation across more than one or two product lines. Room will remain for smaller companies and startups with good ideas, but the advent of several large component and subsystems vendors is a plus for the industry. I think we’ll see further consolidation in 2013.

Out in the field, the deployment of 100-Gbps technology was the second most significant event. Even given the scores of deployment announcements this year, 100-Gbps technology isn’t expected to reach the field in “significant” volumes until next year, say analysts.

The year saw the second wave of technology vendors – those using modules from subsystems suppliers – begin to ship their products to the field. Acacia Communications revealed that it has been supplying modules to such customers since late last year, while the likes of Oclaro (using Opnext’s product), Finisar, Fujitsu Optical Components, NEC, and Civcom raced right behind.

Most deployments this year targeted long-haul applications. Vendors arranged the technological battle lines for metro and regional applications this year, with some choosing to continue down the coherent path and others suggesting a 4×28-Gbps direct detect approach will better meet requirements. We can expect to see a number of systems offerings specifically for metro and regional applications announced in 2013.

The question will be how much of the demand for such technology will be blunted by the effects of the economy, the third big story of 2012. While the troubles in Europe have been well documented, even carriers in China and North America slowed their spending this year. As just mentioned, 100-Gbps technology has managed to escape the overall belt tightening; broadband access-network deployments also have remained steady. Yet there are no guarantees that sales of optical communications technology won’t decline across the board in 2013 if the world economy doesn’t improve.

There were, of course, additional potentially significant stories in 2012 (Google Fiber and the Huawei/ZTE contretemps with the House Intelligence Committee, to name two). I’m sure there’ll be even more stories of interest to look back upon at this time next year.

stephenh@pennwell.com

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