Fiber-optic cable assembly market flourishes for premises data networks
North American sales of fiber-optic cable assemblies in premises data networks are predicted to experience double-digit growth well into the next century
The total North American production of multimode and singlemode fiber-optic cable assemblies (cables and connectors) for installation in premises data and local area network applications is projected to exhibit more than a 20% average annual growth rate from 1993 to 2003.
Based on sales of $246.31 million in 1993, cable assembly sales are expected to increase rapidly at approximately 25.9% per year to more than $779 million in 1998. From 1998 to 2003, sales growth is projected to total $2 billion and to expand at an average annual rate of 20.9%. However, strong sales are forecast to be buffered by a continuing decline of 3.6% in average assembly price.
Sales of fiber-optic cable assemblies in premises data networks are expected to be driven by higher data rates, increasing node counts of LANs and distance expansion of LANs to campus networks.
Compared to singlemode fiber, multimode fiber-optic cable assemblies should maintain their superior market sales figures. Multimode cable assembly sales should climb from $219.85 million in 1993 to $645.8 million in 1998 and to $1.54 billion in 2003. As the number of premises data network installations reaches the saturation point, the average annual growth rate for multimode cable assemblies should drop from 24% between 1993 and 1998 to 19% during 1998 to 2003.
Similarly, the annual growth rate for singlemode cable assemblies should also decrease from 38.2% during 1993 to 1998 to 28.8% from 1998 to 2003. On the other hand, singlemode cable assembly sales should soar from $26.46 million in 1993 to $133.22 million in 1998 and to $472.2 million in 2003.
Market share for multimode cable assemblies is expected to drop from 89% in 1993 to 77% in 2003. In contrast, market share for singlemode cable assemblies should more than double, from 11% to 23%, during that time.
The total fiber-optic cable assembly market for premises data networks should exhibit a 25.9% average annual growth rate from 1993 to 1998 and a 20.9% average annual growth rate from 1998 to 2003.
The average price of various configurations of both singlemode and multimode fiber-optic cable assemblies is expected to decline at an average annual rate of 3.6% from 1993 to 1998 and 2.5% from 1998 to 2003. Rate declines should be driven by increases in:
Standardization and interchangeability among assemblies from different suppliers because of customer pressures
Production volume of specific cable designs by means of automation and assembly redesign for lower-cost production
Competition as market volume becomes more attractive for new entrants
Number of fibers per cable.
Export/import market booms
On the export/import scene, North American sales of fiber-optic cable assemblies for premises data interconnect should markedly increase. During 1993 to 2003, the exports of fiber-optic cable assemblies for premises data interconnect should multiply nearly tenfold, from $3.4 million to $32.5 million. Imports should also rise strongly from $0.68 million to $7.9 million during that time, mainly for patch/drop and work-area cable assemblies.
The positive trade balance is foreseen to jump from $2.7 million in 1993 to $24.6 million in 2003. This translates to an average annual growth rate of 25.3% from 1993 to 1998 and of 24% from 1998 to 2003.
As the sales of standardized singlemode and multimode fiber-cable assemblies expand, assembly imports from foreign companies are expected to average approximately 30% per year over that time. Because of this rapid expansion, some foreign suppliers should find sales advantages in establishing a North American base.
Import assemblies should mainly involve low-priced multimode cables. Conversely, exported cable assemblies should focus on high-priced, high-performance singlemode cables.
LAN connections emerge
During 1998 to 2003, the number of personal computers and related devices deployed on North American business desktops is projected to expand at a rate of 15% to 20% per year. In addition, an increasing share of independent PCs is expected to be tied into networks. Consequently, new PC-to-LAN data communications outlets should surge from 6.23 million in 1994 to almost 22 million in 2003. Moreover, each connection will need a work-area cable assembly and data outlet, horizontal wiring and a wiring closet interconnect. Network trends point to higher average data rates for desktop units, use of multimode fiber in branch links and of singlemode fiber in backbones and risers.
When installing new fiber-optic cable, network providers are typically installing two to three times the connections that were initially required to support expansion without additional labor cost and service disruption.
Within building or premises networks, riser links accounted for 39%, or $298 million, of the fiber and copper interconnect cable assembly sales market in 1993. Market share for these networks is predicted to increase to 43%, or $642 million, by 1998 and to 50%, or $1.32 billion, by 2003. Riser link cable assemblies are used in in-plant (intrabuilding) network installations and to connect nodes in different buildings of a campus network (interbuilding installations).
Continued growth into the turn of the century is estimated to be driven by the move to high-bandwidth LAN backbone networks running at gigabit-per-second speeds, the continuing demand for upgrading older networks to higher data rates and the expansion of the average LAN, both in interbuilding connections and in number of nodes.
The horizontal wiring, work area, wiring closet and equipment room cable links are defined by the physical area of installation. Riser cable initially had a definition that described it physically--a vertical, between-floor interconnect, generally in non-plenum areas. This definition was in contrast to that of horizontal wiring, which is installed along floors and ceilings, often in a plenum--an environmental air-circulation conduit. Horizontal wiring, therefore, is mainly plenum-rated cable. Over time, however, riser-cable construction has been improved to accommodate between-building installations.
The designation "backbone" cable refers more to the modulation rate transport of the cable--relative to the cables in the network branches--than to its physical location, although it is almost always a physical riser/interbuilding or horizontal cable. The backbone definition, therefore, overlaps other categories, in particular, riser and horizontal. However, the tabulated data does not include double counting of cables.
Backbone cables typically transport higher data rates than riser cables. For example, Category 5 twisted-pair copper wire is generally used as a backbone assembly for an office layout of personal computers and other devices interfacing at 1.5 Mbits/sec or slower. However, in a campus network with high-speed computers and workstations, the backbone is usually singlemode fiber handling hundreds of megabits per second. The backbone cable typically runs longer between terminations than the attached branch cables.
Fiber to dominate
Copper cable assemblies--predominantly twisted-pair copper wire--held the leading share of the data cable assembly market in 1993--68% or $519 million. The rapidly rising data rates of network-connected equipment, however, plus the increasing complexity of LANs, are pushing interconnect cable to a greater use of fiber-optic cable. This trend is being accelerated by aggressive product development and cost reduction of opto-electronic components and other optical devices, making fiber cost-competitive with copper over their respective lifecycles.
Fiber-optic cable assembly sales are expected to assume a 52% market share by 1998, and a 76% share, or $2.02 billion, by 2003. Copper cable assemblies should drop to a 48% market share in 1998 and plummet to 24%, or $630.2 million, by 2003.
The trend for fiber-optic cables should be toward singlemode during that time, while copper cables should move to Category 5 unshielded twisted-pair.
During the past several years, the market sales of copper cable assemblies in LANs increased 25% to 30% per year through 1994. Coaxial-cable assembly usage, however, is declining. In twisted-pair copper wire installations, Category 3 (voice grade) and Category 4 (usable to 16 Mbits/sec) cable types are being rapidly displaced by Category 5 (usable to 100 Mbits/sec nominal). The Category 3 and 4 markets have peaked and should markedly decline during the next five years. Category 5 copper wires should achieve slow growth through 1998 and then remain flat from 1998 to 2003.
In 1993, all three copper categories held approximately equal market share. In 1994, however, Category 5 became the leader. By 1998, though, twisted-pair copper wire assemblies are expected to dominate with a 97% share, or $705 million, of the copper interconnected cable-assembly market. But this market is expected to drop to $612 million by 2003. u
Stephen Montgomery is vice president and chief operations officer at Electronicast Corp. in San Mateo, CA.