Peaks and troughs

80311

The current fiberoptics market has been described as the perfect wave that turned into the perfect storm. For anyone with experience in the semiconductor industry, the peaks and troughs of a technology business cycle are quite familiar. Yet they are new to the relatively young fiberoptics industry.

In the course of seeking an end to the storm, I have been unable to find anyone who predicts a strong rebound in 2002—but on the other hand, I don't know anyone who predicted the downturn in 2001 either. My own prediction is that, after the precipitous drop in the latter half of 2001, the market will find confidence in the new year and, based on the continuing development of new products, will see a slow return to growth.

Why the optimism? The best evidence is contained in our R&D review article by contributing editor Jeff Hecht, which identifies the emerging technologies and enhancements of the past year. Granted, they won't all become commercial products in 2002, but the trend is clear—the engineers have kept innovating and adding both capabilities and capacities to WDM systems. Some of the developments, especially of integrated components and tunable lasers, lower system costs and contribute to revenue by supporting the delivery of services.

Innovation proceeds on many fronts, with engineers overcoming limitations on the speed of data transmission and the density of wavelengths sent down a fiber. In a feature article, Michael Dickerson at Codeon takes on the task of explaining modulator design and how chirp, one of the barriers to high-speed data transmission, can be measured. Several other articles look at new uses for some fundamental building blocks of WDM components.

On a macro-economic scale, several forces are working to limit growth, including the debt load of the carriers, some temporary slowing in the growth rate for Internet traffic, and diminished carrier competition in a few markets. In addition, the war on terrorism will have more consequences than we can foresee. However, technology provides the basis for economic strength. So for me, this business trough sounds like just the place where technical innovation begins to carry us up.

W. Conard Holton
Associate Publisher/Editor in Chief
cholton@pennwell.com

More in Market Research