Optical components for datacom to reach $1.3B in 2011, predicts Ovum-RHK

April 11, 2006 London, UK -- Ovum-RHK expects global datacom optical components (OC) sales to grow at an 11% compounded annual growth rate from $728 million in 2005 to $1.34 billion in 2011.

According to the firm, Ethernet transceivers will lead the market growth, with the LAN market transitioning from 1 to 10 Gbit/sec and Fiber Channel (FC) transceivers in the storage market transitioning to 4 Gbit/sec and then 8 Gbit/sec.

While 10 Gigabit Ethernet switch ports are shipping today, the firm says that real deployments of "the most attractive opportunity" over the long run -- covering 300 meters on legacy multimode fiber -- will not begin until 2008. This sub-segment will continue to grow substantially even after 2011, reports the firm. The firm also says that volume shipments of FC transceivers at 8 Gbit/sec will not begin until 2009.

Notwithstanding these opportunities, the firm says that optical components vendors in the datacom space will be "challenged with providing cost-effective products that meets the market demand."

"While the market demand for higher data-rate transceivers presents excellent revenue opportunities for component suppliers, I am worried that the challenging cost requirements create unhealthy financial positions for suppliers," warns Dr. Daryl Inniss, vice president, optical components, Ovum-RHK. "Furthermore, the market needs to define a form factor that gives vendors the opportunity to recoup the research and development invested to produce the high data-rate transceivers."

Details of Ovum-RHK's annual datacom forecast and additional analysis have been published by the firm's optical components advisory service, which combines quarterly analysis and annual forecasts with ongoing commentary and analysis of the global WDM, SONET/SDH, datacom (Fiber Channel and Ethernet), and access optical component markets.