Optical cross connect system sales to rise through 2006, says KMI Corp.

Aug. 28, 2001--The compound annual growth rate of optical cross connect system sales is forecast to rise 124 percent through 2006 while per port prices decline 31 percent per year.

The compound annual growth rate of optical cross connect system sales is forecast to rise 124 percent through 2006 while per port prices decline 31 percent per year.

A new KMI Corp. report, Worldwide Markets for Optical Cross-Connects, pegs the 2000 market at $50 million. It is forecast to rise to $300 million in 2001 and then to $6.3 billion by 2006, given higher port-count products, penetration into smaller offices and expanding regional sales.

Over the same time period, as volumes grow and manufacturing efficiencies improve, the price per port for optical cross-connect systems will fall to $1,100 from the current $10,000.

KMI analysts believe that as the data component of telecommunications traffic continues to rise in proportion to voice, a new economic formula has rendered equipment developed for voice-based revenues too expensive to compete in the high-bit-rate data world. The enormous demand for data is outpacing the switching ability of current workhorse SONET/SDH add-drop multiplexers and cross-connects.

Today, in the early stages of optical cross-connect implementation, relatively small port-count electrical devices with optical interfaces are being given the nod over SONET systems. Manufacturers contend that keeping data in the optical domain at network intersections and eliminating the conversion to electronic form could yield savings as great as 70 percent. Savings may also accrue through replacement of SONET/SDH multiplexers and cross-connects with more streamlined and compact subsystems, whether they are optical-to-electronic-to-optical (OEO) or all optical.

Cross-connect systems to migrate from OEO to all optical

Sales of cross-connect systems based on all-optical technology will exceed sales of systems based on optical-electronic-optical technology in 2006, by which time the market is forecast to reach $6.3 billion. OEO cross-connects will maintain the market leadership position until 2005, however, and are expected to be a viable technology choice after that time in network locations where grooming is required (e.g., aggregating traffic onto the backbone) or where regeneration is needed.

The KMI Corp. report details use of optical cross-connect systems in carrier networks. It provides an overview of switching technologies and a worldwide market forecast. It also describes the competitive landscape and includes vendor profiles.

About KMI Corp:

KMI Corporation, a fiber optics market research firm, provides reports on worldwide fiber optics markets, bi-monthly newsletters, fiber optics route maps, and conferences on global, regional and undersea fiber optics markets. For more information, visit www.kmicorp.com.

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