Optical switch market to grow 24%

3 January 2003 -- The market for optical switching devices will grow at an annual rate of over 24% between 2003 and 2006, according to Communications Industry Researchers Inc.

Jan 3rd, 2003

3 January 2003 -- The market for optical switching devices will grow at an annual rate of over 24% between 2003 and 2006, according to the report "Optical Switching Markets: 2003-2006" from Communications Industry Researchers Inc (CIR).

However, a switching manufacturer's success in the market will depend heavily on its technology choices and the timing of its product releases.

During the optical boom period there was an assumption that victory in the optical switching space would go to the supplier with the most advanced technology but CIR says that, for the next few years, the fastest growing markets for optical switching devices will be those with the most conventional technology:

-- The most rapidly growing segment is OEO switching subsystems, driven mostly by the need for OEO cross-connects in the public network.
-- A renaissance of liquid crystal technology in reconfigurable OADMs will help to give this sector healthy growth.
-- Even the optomechanical sector can expect to grow, since switching devices in this sector are by far the most accepted type of technology for protection switching.

But CIR does not see optical switching remaining technologically conservative forever. There will be significant new revenue opportunities generated from improving on older optical switching technologies in the next two years, but emerging customer requirements for small footprint, integration with other components, and rapid response times will lead to the decline of older optical switching technologies. For example, the now ubiquitous optomechanical switches are what customers are not going to want in a few years time - they are huge, slow, and hard to connect to other devices.

The alternative is either MEMS switches, such as those made by OMM, or various species of PLC-based switch, such as those made by OpTun. Unfortunately, while in many cases they would like to adopt these technologies, many questions still seem to remain in users' minds about the reliability of devices built with these new technologies, and they are also usually much more expensive than "lower tech" alternatives. But if the future belongs to MEMS and solid-state/PLC-based switches and the short-term opportunities are with more conventional opportunities, then market planning becomes essential to the success of optical switching firms.

www.cir-inc.com

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