Fiber equipment sales to double worldwide
Fiber equipment sales to double worldwide
Sales of fiber-optic telecommunications equipment will double over the next seven years, according to Introduction to the Fiber-Optic Telecommunications Equipment Market, the most recent fiber-optics study from Frost & Sullivan, Mountain View, CA. The market research firm says that worldwide sales will rise from the $7.29 billion recorded in 1996 to $15.42 billion in 2003, a compound annual growth rate (cagr) of 11%.
Two factors will spur this growth, according to the report: increased deregulation of telecommunications markets worldwide, which will lead to modernization of communications infrastructure to meet the demands of competition, and what the company terms "an unrelenting pressure to increase bandwidth capacity." However, the report warns that the fiber horizon is not trouble-free. The availability of other technologies, such as direct broadcast satellite and high-bit-rate digital subscriber line copper transmission, means that fiber manufacturers must keep a close eye on potential technological competitors. The large capital expenditures required to develop new fiber-optic products will hinder the entrance of smaller companies into the marketplace as well.
Other trends will also affect the market`s future, according to the report. For example, the profit margins enjoyed by equipment manufacturers will shrink as prices drop. The cost to manufacture fiber-optic components will also drop in response to customer demands for prices comparable to other media. As the optical state of the art advances, networks will evolve toward all-optical architectures. Finally, Frost & Sullivan warns that equipment manufacturers should prepare now for the eventual saturation of the North American marketplace. The company predicts that greater opportunities for fiber exist in markets such as China, Brazil, and Eastern Europe.
The report examines the prospects for several equipment categories, such as the following:
The transmitter market should enjoy a cagr of 14% from now through 2003. Rising demand for access/loop sources coupled with the falling cost of optical sources will key this expansion.
Fiber-optic cable sales will grow at an estimated cagr of 12%, keyed by demands for increased transmission speeds over greater distances.
Amplifiers for fiber-optic networks will experience a cagr of 5% in worldwide sales. The emergence of wdm will provide a significant push in this area.
The wdm market segment should experience the greatest growth, reflecting a cagr of 32%. This comes despite the fact that time-division multiplexing is less expensive in some applications and the high cost of dense wdm components impedes market acceptance, according to the report.
The report further defines large-scale competitive issues and identifies the major players in the market. For more information on the report, call Frost & Sullivan at (415) 961-9000 or fax: (415) 961-5042.u